Anghami (ANGH) 6-KCondensed Interim Consolidated Financial Statements

Exhibit 99.1

ANGHAMI INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 and 2022

ANGHAMI INC.

Condensed interim consolidated statement of comprehensive income

The attached notes 1 to 21 form part of these condensed interim consolidated financial statements.

ANGHAMI INC.

Condensed interim consolidated statement of financial position

The attached notes 1 to 21 form part of these condensed interim consolidated financial statements.

ANGHAMI INC.

Condensed interim consolidated statement of changes in equity

The attached notes 1 to 21 form part of these condensed interim consolidated financial statements.

ANGHAMI INC.

Condensed interim consolidated statement of cash flows

The attached notes 1 to 21 form part of these condensed interim consolidated financial statements.

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

1 CORPORATE INFORMATION

Anghami Inc. (the “Group” or the “Parent”), was incorporated as a Cayman Islands exempted Group on March 1, 2021 with its registered office at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The mailing address of our principal executive office is 16th Floor, Al-Khatem Tower, WeWork Hub71, Abu Dhabi Global Market Square, Al Maryah Island, Abu Dhabi, United Arab Emirates.

The principal activity of the group is digital entertainment and online streaming including music, podcasts, music videos, and live events. The Group has a freemium business model whereby premium (paying) users get unlimited access to online streaming content, ads free streaming experience, and unlimited downloads. The ad-supported users do not pay subscription fees and are provided with limited access to on-demand online streaming content without the ability to download content. The Group secures its content via licenses with labels and independent artists to provide its service.

2 GOING CONCERN

For the period ended June 30, 2023 and 2022 the Group incurred a loss of USD 12,147,008 and USD 57,809,776 respectively; and as at June 30, 2023 and December 31, 2022 the Group has accumulated losses of USD 135,089,448, USD 123,135,335 respectively; and negative working capital (i.e. excess of current liabilities over current assets) of USD 22,568,712 and USD 16,604,967 respectively. In addition to the cash flows to be generated from the Group’s operations, the continuation of the Group’s operations is dependent primarily on the ability to raise funding, and accessibility and availability thereof. The Group’s management acknowledge that there is a risk that the quantum and timing of cash flows may not be achievable in line with the twelve months forecasts from the date of approval of the Group’s condensed interim consolidated financial statements. A review of the strategic plan and budget, including expected developments in liquidity and capital were considered.

Based on management’s forecasts, the day-to-day operations and expenditure requirements are anticipated to be funded primarily by both cash generated through the ongoing operations and ability to access additional funding.

The condensed interim consolidated financial statements have been prepared assuming that the Group will continue as a going concern which is contingent upon the Group’s ability to access additional funding. Accordingly, the condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amounts and classification of liabilities, or any other adjustments that might result in the event the Group is unable to continue as a going concern.

3 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

3.1 Basis of preparation

These condensed interim consolidated financial statements are for the six-month periods ended June 30, 2023 and 2022 and are presented in United States Dollars (“USD”), which is the functional currency of the Group. They have been prepared in accordance with IAS 34‘Interim Financial Reporting’.

These condensed interim consolidated financial statements do not include all of the information required in annual consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2022. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual financial statements.

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

3 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

3.2 Basis of consolidation

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent Group, using consistent accounting policies. Intra-group balances and transactions, including unrealized profits arising from intra-group transactions, have been eliminated. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Non-controlling interests represent the equity in subsidiaries that is not attributable, directly or indirectly, to the Parent shareholders.

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 a 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:

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. 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 condensed interim consolidated statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interests and other components of equity, while any resultant gain or loss is recognized in profit or loss. Any investment retained is recognized at fair value.

Details of subsidiaries as at June 30, 2023 and December 31, 2022 were as follows:

The carrying amount of the Group’s investment in the subsidiary and the equity of the subsidiary is eliminated on consolidation.

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

3 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

3.2 New and amended standards and interpretations

A number of amended standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards.

3.3 Accounting policies

The accounting policies used for the condensed interim consolidated financial statements for the six-month period ended June 30, 2023 are consistent with those used in the annual consolidated financial statements for the year ended December 31, 2022.

3.4 Critical accounting judgements, estimates and assumptions

When preparing the condensed interim consolidated financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the condensed interim consolidated financial statements for the six-month period ended June 30, 2023 and 2022, including the key sources of estimation uncertainty, were the same as those applied in the Group’s annual consolidated financial statements for the year ended December 31, 2022.

4 REVENUE

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

5 SEGMENT INFORMATION

The Group has three reportable segments: Revenue from subscriptions, Revenue from advertisement, and Revenue from live events. Segments were identified based on the Group’s internal reporting and how the chief operating decision maker (“CODM”) assesses the performance of the business. The Premium service is a paid service in which customers can listen on demand and offline. Revenue for the Premium segment is generated through subscription fees. The Ad-Supported service is free to the user. Revenue for the Ad-Supported segment is primarily generated through the sale of advertising across the Group's content. Revenues from live events are generated from the sale of tickets, food and beverage & sponsorships. Royalty costs are primarily recorded in each segment based on specific rates for each segment agreed with the rights holders. The remaining cost of revenue items that are not specifically associated to either of the segments are allocated based on user activity in each segment. No operating segments have been aggregated to form the reportable segments.

Key financial performance measures of the segments including revenue, cost of revenue, and gross profit are as follows:

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

5 SEGMENT INFORMATION (continued)

Reconciliation of gross profits

Selling and marketing, operating expenses, finance income, and finance costs are not allocated to individual segments as these are managed on an overall group basis. The reconciliation between reportable segment gross profit to the Group’s loss before tax is as follows:

Revenue by market

Premium revenue is attributed to a country based on where the membership originates. Ad-Supported revenue is attributed to a country based on where the advertising campaign is viewed. Live events revenue is attributed to a country based on where the events occurred.

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

6 GENERAL AND ADMINISTRATIVE EXPENSES

The total settlement amount to USD 2,000,000 presented in trade and other payables in the statements of condensed interim consolidated financial position as:

7 GOVERNMENT GRANTS

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

7 GOVERNMENT GRANTS (continued)

As of June 30, 2023 and December 31, 2022 the Group had a Accrued Government grants of USD 805,563 and USD 2,055,978 respectively. The accrued government grants are due from governmental entities not yet claimed. The government grants revenue recognized in the condensed interim consolidated statement of comprehensive income for the six-month period ended June 30, 2023 was USD 1,431,490 (USD 2,123,055 for the six-month period ended June 30, 2022).

8 PROPERTY AND EQUIPMENT

The property and equipment net book value consists of the following:

Total expense arising from depreciation on property and equipment recognised in the condensed interim consolidated statement of comprehensive income as part of general and administrative expense for the six-month period ended June 30, 2023 was USD 241,107 (USD 67,720 for the six-month period ended June 30, 2022).

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

9 INTANGIBLE ASSETS

The movement of intangible assets during the period is as follows:

Work in progress represents costs incurred in relation to internally produced originals and sessions which are not yet released as well as software being developed by a third party.

Based on the new contract, a total amount of USD 1,000,000 is recorded as an intangible asset and the contract period will end on June 1, 2024

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

9 INTANGIBLE ASSETS (continued)

Amortization charged is allocated as follows:

10 TRADE AND OTHER RECEIVABLES

Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days.

An analysis of expected credit losses is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, product type, customer type and rating, and coverage by letters of credit or other forms of credit insurance). The calculation reflects the probability-weighted outcome and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.

At June 30, 2023 and December 31, 2022, the ageing analysis of unimpaired trade receivables is as follows:

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

11 CASH AND BANK BALANCES

Cash and cash equivalents reflected in the condensed interim consolidated statement of cash flows comprise the following statement of financial position amounts:

Bank overdrafts carry an interest rate between 7% - 10%.

12 ISSUED CAPITAL AND RESERVES

As of June 30, 2023 and December 31, 2022, the Group has authorised 2,150,000,000 ordinary shares and 5,000,000 preference shares.

As of June 30, 2023 and December 31, 2022, the Group has 26,005,654 outstanding ordinary shares amounting to USD 2,601 and has related share premium of USD 116,505,240.

13 SHARE-BASED PAYMENTS

At June 30, 2023, the employee share scheme reserve balance is USD 1,363,995 (at December 31, 2022:
USD 1,512,490).

The Group has implemented a long term incentive plan whereby the shares of Anghami have been converted into shares in Anghami Inc. the value of those share has dropped significantly due to the share price drop of Anghami Inc. resulting in a reversal of the provisions taken in previous years amounting to USD 148,495 recognized in the condensed interim consolidated statement of comprehensive income as part of other income for the six-month period ended June 30, 2023 (USD 2,214,795 reversal of accruals no longer required netted off by USD 1,655,529 employees’ share-based compensation expense for the six-month period ended June 30, 2022).

Share options outstanding are the follows:

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

13 SHARE-BASED PAYMENTS (continued)

The options are fair valued using Monte Carlo simulation. The following assumptions are used in calculating the fair values of the options:

14 GOODWILL

On 3 June 2022, the Group acquired 100% of the shares of Spotlight Recreational Services LLC (“Spotlight”), a Company incorporated under the laws of the United Arab Emirates, pursuant to the signed sale and purchase agreement. Spotlight is engaged in operating live events. This acquisition has been accounted for in accordance with IFRS 3 Business Combinations.

Management believes there are no material provisional assets and liabilities to be recorded at the date of the acquisition, further Management is of the opinion that there is no identifiable intangible assets at the date of acquisition, hence all the purchase consideration were recorded as goodwill in these condensed interim consolidated financial statements. The purchase consideration were as follows:

At June 30, 2023, the share payment mentioned above was still due for issuance.

The acquired business contributed a loss of USD 64,929 and revenue of USD 1,734,679 for the six-month period ended June 30, 2023.

15 TRADE AND OTHER PAYABLES

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

16 AMOUNT DUE FROM/TO RELATED PARTIES

Related parties represent associated companies, shareholders, directors and key management personnel of the Group, and entities controlled, jointly controlled or significantly influenced by such parties. Pricing policies and terms of these transactions are approved by the Group’s management.

16.1 Related party balances

Due from related parties:

Due to shareholders and related parties:

The above balances are interest free and have no fixed repayment terms.

16.2 Related party transactions

Significant transactions with related parties included in the condensed interim consolidated statement of comprehensive income are as follows:

Du and Mobily utilize their network to facilitate subscription payments for the Group’s users.

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

16 AMOUNT DUE FROM/TO RELATED PARTIES (continued)

16.3 Compensation of key management personnel of the Group

17 WARRANT LIABILITIES

The warrants are initially recognised at fair value, and in subsequent periods measured at fair value through profit or loss with any changes in fair value recognised in profit or loss until the warrants are exercised, redeemed, or expire. The public warrants are listed on NASDAQ under the symbol “ANGHW”.

As of June 30, 2023, and December 31, 2022, the Group has outstanding 10,000,000 public warrants, 720,000 private placement warrants and 152,800 service warrants. The carrying value the warrants as of June 30, 2023 is USD 771,105 (December 31, 2022: USD 562,722).

The fair value change of the warrant liabilities recognized in the condensed interim consolidated statement of comprehensive income has an increase of USD 208,383 for the six-month period ended June 30, 2023 (decrease of USD 3,597,835 for the six-month period ended June 30, 2022).

The warrants are fair valued using Black-Scholes model. The following assumptions are used in calculating the fair values of the warrants:

18 CONTINGENCIES AND COMMITEMENTS

18.1 Contingencies

There exist a few pending legal actions, proceedings, and claims or may be instituted or asserted against the Group. These may include but are not limited to matters arising out of alleged infringement of intellectual property; alleged violations of consumer regulations; employment-related matters; and disputes arising out of supplier and other contractual relationships. As a general matter, the music and other content made available on the Group’s service are licensed to the Group by various third parties. Many of these licenses allow rights holders to audit the Group’s royalty payments, and any such audit could result in disputes over whether the Group has paid the proper royalties. If such a dispute were to occur, the Group could be required to pay additional royalties, and the amounts involved could be material. The Group expenses legal fees as incurred. The Group records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Group’s operations or its financial position, liquidity, or results of operations.

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

18 CONTINGENCIES AND COMMITEMENTS (continued)

18.1 Contingencies (continued)

Pop Arabia commenced a lawsuit against Anghami in December 2022 which is still ongoing as of June 30, 2023 with an accusation of “unlicensed exploitation of musical and lyrical works”. The estimated amount is immaterial should the action be successful as they are only claiming the rights for 12 songs.

Based on management assessment, currently there are no material cases, claims or proceedings of such quantum which require provision or disclosure as contingent liabilities.

18.2 Commitments

The Group is subject to the following minimum guarantee amounts relating to investments in joint ventures and the content on its service and publishing rights, the majority of which relate to initial investments and minimum royalty payments associated with its license agreements for the use of licensed content and publishing royalties, as at December 31:

In addition to the minimum guarantees listed above, the Group is subject to various service agreements including a service agreement with Amazon for the use of Amazon servers and cloud as at June 30, 2023.

19 LOSS PER SHARE

The following table reflects the loss and share data used in the basic and diluted loss per share calculations:

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorization of these condensed interim consolidated financial statements.

As the Group was loss-making in all periods presented in these condensed interim consolidated financial statements, potentially dilutive instruments all have an anti-dilutive impact and therefore have been excluded in the calculation of diluted weighted average number of ordinary shares outstanding. These instruments include certain outstanding warrants and share options and could potentially dilute earnings per share in the future.

ANGHAMI INC.

Notes to the condensed interim consolidated financial statements

20 FAIR VALUES OF FINANCIAL INSTRUMENTS

Financial instruments comprise financial assets and financial liabilities.

Financial assets consist of cash and cash equivalents, trade receivables, contract assets and amount due from related party. Financial liabilities consist of trade payables, lease liability, overdrafts, convertibles notes, working capital loans and amount due to related party.

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

The Private Warrants were valued using Black Scholes Model and the Shared-Based Payments were valued using Montecarlo Simulation, which are both considered to be a Level 3 fair value measurement. The primary unobservable inputs utilized in determining the fair value of the derivatives warrant liabilities and Shared-Based Payments are the expected volatility of our ordinary shares and risk-free rate.

21 SUBSEQUENT EVENTS

On August 21, 2023, Anghami Inc. sold and issued to SRMG ventures (“SRMG”), the corporate venture capital arm of Saudi Research and & Media group, (“SRMG”) a senior unsecured convertible note in the principal amount of USD 5,000,000, which was convertible into Anghami Inc.’s ordinary shares, par value USD 0.0001 per share, at an original conversion price of USD 2.50 per share, subject to certain conditions and limitations set forth in the Convertible Note, between the Company and SRMG. Anghami Inc. will use the net proceeds from the Convertible Note for working capital, growth and other general corporate purposes. The Convertible Note contains customary events of default, bore interest daily at a simple rate of 11.0% per annum, was due and payable in full three years following the date on which the Convertible Note was deemed issued. The Note Purchase Agreement also provides SRMG with the right to purchase up to an additional USD 5,000,000 additional principal amount of the Convertible Note within 12 months of the closing. On November 29, 2023, SRMG converted the entire outstanding principle amount of the convertible note and all accrued and unpaid interest into 2,055,000 ordinary shares of Anghami Inc.

On October 10, 2023, Anghami Inc. issued in a private placement 950,000 ordinary shares to MBC FZ LLC (“MBC”) for payment of USD 2,850,000 of marketing and branding services provided by MBC to the Company from 2021 to 2023.

On November 21, 2023, Anghami Inc. entered into a transaction with OrionPlus2 (“OSN”), an affiliate of Panther Media Group Limited, pursuant to which among other things , 1) OSN agreed to subscribe for up to USD 50,000,000 of ordinary shares of the Group in a private placement, and 2) Anghami Inc. agreed to acquire from OSN the OSN+ platform. The transaction is anticipated to close in the first quarter of 2024, subject to certain closing conditions including certain regulatory approvals. After closing, OSN will own a majority of the Anghami Inc’s outstanding ordinary shares.

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