Company registration number 13027499 (England and Wales)
HQO UK LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
HQO UK LIMITED
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 9
HQO UK LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 1 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
4
32,641,876
22,686,460
Current assets
Debtors
5
1,671,821
1,009,299
Cash at bank and in hand
2,091,792
478,673
3,763,613
1,487,972
Creditors: amounts falling due within one year
6
(596,033)
(510,264)
Net current assets
3,167,580
977,708
Total assets less current liabilities
35,809,456
23,664,168
Creditors: amounts falling due after more than one year
7
(40,920,283)
(25,286,770)
Net liabilities
(5,110,827)
(1,622,602)
Capital and reserves
Called up share capital
100
100
Profit and loss reserves
(5,110,927)
(1,622,702)
Total equity
(5,110,827)
(1,622,602)

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The director of the company has elected not to include a copy of the income statement within the financial statements.true

The financial statements were approved by the board of directors and authorised for issue on 19 August 2024 and are signed on its behalf by:
G D Gomer
Director
Company registration number 13027499 (England and Wales)
HQO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
1
Accounting policies
Company information

HqO UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is C/O Birketts LLP, One London Wall, Barbican, London, EC2Y 5EA.

1.1
Reporting period

This is the company's second reporting period. The company was incorporated on the 18 November 2020 and the first reporting period for 13 months had an end date of 31 December 2021. The current reporting period was a year and is therefore not fully comparable with the previous accounting period.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

1.3
Going concern

At the balance sheet date, following a net loss of £3,488,225 (2021 - £1,622,602), there were net current assets of £3,167,580 (2021 - £977,708) and net liabilities of £5,110,827 (2021 - £1,622,602). The company has continued to trade at a loss in the period since the balance sheet date and relies on the support of its parent company, HqO Inc to whom it owed £28,128,139 (2021 - £12,206,089) as at 31 December 2022.

 

HqO Inc, the ultimate parent company, has confirmed in a letter of support that it will neither request the repayment of the outstanding amount as at 31 December 2022 nor of the additional funding provided since that date for at least a year following the signature of these accounts. In addition the parent company will provide such necessary financial support to enable the company to meet its debts as they fall due.

 

The parent company's audited financial statements for the year ended 31 December 2022 include a note about its recurring losses since inception and its own significant accumulated deficit as at that date. The parent company’s audit report references this and states the condition raises substantial doubt about the parent company's ability to continue as a Going Concern.

 

Due to successful debt and equity raisings, the parent company did have significant cash reserves at 31 December 2022 and has raised further funds since that date. Additionally, the US group, of which the company is a wholly owned subsidiary, are forecasting it will become profitable and cash positive in the future. The parent company will have sufficient resources to support the company and group for a year from the date of signing these accounts.

 

Based on the US group's profit projections and on the assumption that the support of its parent company will be ongoing, the directors believe that HqO UK Ltd has sufficient resources to continue in operational existence for the foreseeable future and that it is appropriate to adopt the going concern basis in preparing the company's financial statements.

HQO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 3 -
1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.5
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.7
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

HQO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.8
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.9
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.10
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

1.11
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

HQO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Employees

The average monthly number of persons employed by the company during the year was:

2022
2021
Number
Number
Total
16
6
4
Fixed asset investments
2022
2021
£
£
Shares in group undertakings and participating interests
32,641,876
22,686,460
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022
22,686,460
Additions
9,955,416
At 31 December 2022
32,641,876
Carrying amount
At 31 December 2022
32,641,876
At 31 December 2021
22,686,460
HQO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
5
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
865,756
534,167
Other debtors
220,303
58,854
1,086,059
593,021
2022
2021
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
585,762
416,278
Total debtors
1,671,821
1,009,299
6
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
31,559
7,702
Taxation and social security
88,640
38,524
Other creditors
475,834
464,038
596,033
510,264
7
Creditors: amounts falling due after more than one year
2022
2021
£
£
Amounts owed to group undertakings
28,128,139
12,206,089
Other creditors
12,792,144
13,080,681
40,920,283
25,286,770
HQO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
8
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was qualified and the auditor reported as follows:

Disclaimer of opinion on financial statements

We were engaged to audit the financial statements of HqO UK Limited (the 'company') for the year ended 31 December 2022 which comprise , the statement of financial position and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

We do not express an opinion on the accompanying financial statements of the company.

 

Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

 

Basis for disclaimer of opinion

There was insufficient audit evidence available to us to confirm that the cost of the fixed asset investments has not been materially impaired. Fixed asset investments of £32.6m comprise the cost of two wholly owned subsidiaries. The company has not been able to provide sufficient corroboratory evidence to support their assessment that no material impairment is required at the reporting date. We were unable to confirm or verify this assessment by alternative means. In addition, the company has not maintained adequate accounting records to disclose with reasonable accuracy, at any time, the financial position of the company at that time. As a result of these matters the scope of our audit work was limited and we are unable to form an opinion whether the financial statements are free from any material misstatements.

 

Senior Statutory Auditor:
Iain McManus
Statutory Auditor:
Sanders
Date of audit report:
19 August 2024
9
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

2022
2021
£
£
15,856
88,448
HQO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
10
Events after the reporting date

On 27 November 2023, the company acquired 100% of Symbiosy s.r.o and 100% of Symbiosy Hungary Kft, companies registered in Slovakia and Hungary respectively, for an initial purchase price of $5,000,000 and future consideration based on the companies' performance post-acquisition.

 

The company is in negotiations with the vendors of the two fixed asset investments to agree the amount of the earn out consideration element of the deferred consideration which is included within Other Creditors falling due after more than one year (note 7). At this stage the director is not able to confirm if there will be a material adjustment to the deferred consideration.

11
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Other information

HQO Inc

100% of the share capital of the company is owned by HQO Inc, a company registered in the USA. During the period, HQO Inc provided funds to the company. At the balance sheet date, £28,128,139 (2021 - £12,206,089) was due to HQO Inc. The balance is interest free and the amount is due on demand although HQO Inc have confirmed in a letter of support that they will not demand a repayment for at least a year following the signature of these accounts. Accordingly, the amount outstanding and due to HqO Inc. is shown as falling due after more than one year.

 

The Office App

The company owns 100% of the shares in Office App International Ltd, a company registered in England together with its subsidiary Office App B.V, (collectively, "Office App"), a company registered in the Netherlands. During the period, the company provided funds to Office App B.V.. At the balance sheet date £585,762 (2021 - £416,278) is due from Office App B.V.. The balance is interest free and the amount is due on demand, although the company will not demand a repayment in the near future. Accordingly, the amount due to the company has been reclassified as a debtor falling due after more than one year.

 

 

HQO UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
12
Parent company

The immediate and the ultimate parent company is HQO Inc, whose consolidated financial statements include this company's results.

 

There is no one controlling party of the parent company, HQO Inc.

 

HQO Inc's registered address is 1209 Orange Street, Wilmington, Delaware, 19801, USA.

The following are the parents of the largest and smallest groups in which this company's results are consolidated:

Largest group
HqO Inc
Smallest group
HqO Inc
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