Company Registration No. 09579886 (England and Wales)
Huggg Limited
Unaudited financial statements
for the year ended 31 December 2023
Pages for filing with the registrar
Huggg Limited
Contents
Page
Statement of financial position
1 - 2
Notes to the financial statements
3 - 10
Huggg Limited
Statement of financial position
As at 31 December 2023
1
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
3
540,403
403,782
Tangible assets
4
16,975
26,731
557,378
430,513
Current assets
Debtors
5
3,218,016
2,082,884
Cash at bank and in hand
5,189,649
6,219,390
8,407,665
8,302,274
Creditors: amounts falling due within one year
6
(8,191,055)
(7,075,279)
Net current assets
216,610
1,226,995
Total assets less current liabilities
773,988
1,657,508
Creditors: amounts falling due after more than one year
7
(562,530)
(300,000)
Net assets
211,458
1,357,508
Capital and reserves
Called up share capital
9
2,988
2,970
Share premium account
2,896,540
2,896,540
Capital redemption reserve
1,332,956
1,358,545
Other reserves
1,000,000
1,000,000
Profit and loss reserves
(5,021,026)
(3,900,547)
Total equity
211,458
1,357,508
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
For the financial year ended 31 December 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
Huggg Limited
Statement of financial position (continued)
As at 31 December 2023
2
The financial statements were approved by the board of directors and authorised for issue on 1 August 2024 and are signed on its behalf by:
Paul Wickers
Director
Company Registration No. 09579886
Huggg Limited
Notes to the financial statements
For the year ended 31 December 2023
3
1
Accounting policies
Company information
Huggg Limited is a private company limited by shares incorporated in England and Wales. The registered office is 71 Queen Victoria Street, London, EC4V 4BE.
1.1
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The company's financial statements have been prepared on a going concern basis on the grounds that current and future sources of funding or support will be more than adequate for the company's needs. In assessing going concern, the directors have a reasonable expectation that the company will continue as a going concern and is able to meet all of its obligations as they fall due for a minimum of 12 months from the date of approval of these financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for 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.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software development
3 years
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computer equipment
33% straight line basis
Huggg Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
4
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
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.
1.8
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, 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.
Huggg Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
5
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.
1.9
Compound instruments
The component parts of compound instruments issued by the company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. Where it meets the definition of a basic financial instrument it is measured on an amortised cost basis using the effective interest method, otherwise it is measured on a fair value basis through profit or loss until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.
1.10
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Huggg Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
6
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
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.
The company operates an employee share ownership plan (ESOP) trust and has de facto control of the shares held by the trust and bears their benefits and risks. The company records assets and liabilities of the trust as its own. Consideration paid by the ESOP scheme for shares of the company is deducted from equity. Finance costs and administrative expenses incurred by the company in relation to the ESOP are recognised on an accruals basis.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Share-based payments
The share options programme allows employees to acquire shares in the company. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employee becomes unconditionally entitled to the options. The fair value of the options granted is measured based on market values at the date of grant, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of options that are vesting.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
Huggg Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
7
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
27
26
3
Intangible fixed assets
Software development
£
Cost
At 1 January 2023
1,769,388
Additions
578,371
At 31 December 2023
2,347,759
Amortisation and impairment
At 1 January 2023
1,365,606
Amortisation charged for the year
441,750
At 31 December 2023
1,807,356
Carrying amount
At 31 December 2023
540,403
At 31 December 2022
403,782
Huggg Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
8
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023
59,629
Additions
5,590
Disposals
(26,230)
At 31 December 2023
38,989
Depreciation and impairment
At 1 January 2023
32,898
Depreciation charged in the year
13,001
Eliminated in respect of disposals
(23,885)
At 31 December 2023
22,014
Carrying amount
At 31 December 2023
16,975
At 31 December 2022
26,731
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
100,358
219,960
Corporation tax recoverable
277,198
154,898
Other debtors
2,840,460
1,708,026
3,218,016
2,082,884
6
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
241,220
Trade creditors
283,870
175,153
Taxation and social security
49,172
92,258
Other creditors
7,616,793
6,807,868
8,191,055
7,075,279
Huggg Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
9
7
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
262,530
Convertible loans
300,000
300,000
562,530
300,000
The loan of £300,000 is charged at an annual interest of 8% pa and is due for repayment on 31 July 2025.
On 22 September 2023 the company was advanced a loan from NatWest bank of £500,000. The loan was secured over fixed and floating charges over the assets of the company.
8
Share-based payment transactions
Certain employees participate in the share incentive scheme operated by the company.
The fair value of the options is calculated based on the Black Scholes valuation model and assumptions as determined by management at the date of grant of the share options.
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023
93,978
93,978
0.01
0.01
Forfeited
(2,805)
0.01
Outstanding at 31 December 2023
91,173
93,978
0.01
0.01
Exercisable at 31 December 2023
91,173
93,978
0.01
0.01
The options outstanding at 31 December 2023 had an exercise price of £0.01.
The share options granted on 10 August 2021 and 24 January 2020 are exercisable on the following conditions: 4 years from the employee's start date, upon an exit from the company or when they leave their employment with the company.
Liabilities and expenses
During the year, the company recognised total share-based payment expenses of £(25,589) (2022 - £149,336) which related to equity settled share based payment transactions.
Huggg Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
10
9
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
171,427
169,615
1,714
1,696
"G" Shares of 1p each
12,876
12,876
129
129
Seed Shares of 1p each
114,473
114,473
1,145
1,145
298,776
296,964
2,988
2,970
10
Other reserves
2023
2022
£
£
At the beginning of the year
1,000,000
-
Additions
-
1,000,000
At the end of the year
1,000,000
1,000,000
Included in other reserves is equity of £1,000,000 convertible to preferred stock of the company and it is an unsecured obligation of the company.
11
Related party transactions
As at the 31 December 2023, the company owed to the director £10 (2022: £10). The loan is interest free and repayable on demand.