Company registration number 13027499 (England and Wales)
HQO UK LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HQO UK LTD
COMPANY INFORMATION
Directors
G D Gomer
C Garbarino
(Appointed 30 April 2024)
Secretary
Birketts Secretaries Limited
Company number
13027499
Registered office
C/O Birketts LLP
One London Wall
Barbican
London
EC2Y 5EA
Auditor
Harris & Trotter LLP
101 New Cavendish Street
London
W1W 6XH
HQO UK LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 32
HQO UK LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

Business Model

The group operates in the corporate real estate sector, supplying software and services across the UK and EU through the parent and through three wholly owned trading subsidiaries. The business creates value through operational efficiency, innovation, and long-term client relationships.

Strategy and Objectives

The group aims to achieve sustainable growth by expanding its customer base and enhancing product capabilities.

Review of Business Performance

In 2023, turnover increased by 41.8% to £7.7m, driven by growth within existing customer portfolios and the addition of new customers.

Principal risks and uncertainties

Key risks include currency volatility and long term group cash flow requirements. The group uses hedging strategies, maintains multiple supplier relationships, and conducts regular reviews of company costs.

Development and performance

The group generated net cash of £2.6m from operating activities and had year-end cash balances of £4.1m. Debt levels remained at zero.

Key performance indicators

Management expects moderate growth in 2024 with a focus on maintaining customers and implementing cost cutting measures internally.

Promoting the success of the company

The directors consider stakeholder interests in strategic decisions, engaging regularly with employees and suppliers, and promoting the group’s long-term success.

On behalf of the board

C Garbarino
Director
28 May 2025
HQO UK LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company and group is the design of software tools to enhance tenant and employee engagement in commercial properties. The company has commercial clients across US, UK and Europe.

 

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

G D Gomer
S J Warren
(Resigned 30 April 2024)
C Garbarino
(Appointed 30 April 2024)
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Post reporting date events

Office App B.V., part of the HqO UK Group, is no longer engaged in selling its software product as of 31 December 2024. There have been no other significant events affecting the group since the year end.

Future developments

The group plans to invest in automation, additional software development, and AI to expand its US and European customer base.

Energy and carbon report

As the group is a medium group, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

HQO UK LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Going Concern

At the balance sheet date, following a group net loss of £4.4m (2022 - £8.4m loss), there were group net current assets of £6.4m (2022 - £4.34m) and group net liabilities of £15.7m (2022 - £11.2m). The group 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 £34.7m (2022 - £31.1m) as at 31 December 2023.

HqO Inc, the ultimate parent company, has confirmed in a letter of support that it will neither request the repayment of the outstanding amount at 31 December 2023 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 group to meet its debts as they fall due.

The parent company's audited financial statements for the year ended 31 December 2023 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 2023. Additionally, the US group, of which the group 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 LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
C Garbarino
Director
28 May 2025
HQO UK LTD
INDEPENDENT AUDITOR'S REPORT
TO THE DIRECTORS OF HQO UK LTD
- 5 -

Disclaimer of opinion on financial statements

We were engaged to audit the financial statements of HQO UK Limited (the 'Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Company’s Statement of Comprehensive income, the Consolidated Statement of Comprehensive Income, the Company’s Statement of Financial Position, the Consolidated Statement of Financial Position, the Company’s Statement of Changes in Equity, the Consolidated Statement of Changes in Equity, and the related notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including the 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 Group. 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

This is HqO UK Limited's first year reporting on a consolidated basis, the Group includes the subsidiaries Leesman Limited, Office App BV, Office App International Limited, Symbiosy S.R.O and Symbiosy Hungary Kft. During the course of our audit, we were unable to obtain sufficient audit evidence in respect of multiple elements of the subsidiaries’ financial statements, which has a material and pervasive impact on the financial statements. As such, we are unable to express an opinion over the consolidated financial statements.

 

As a result of this, we have not been able to conduct audit procedures on any of the aforementioned entities. We were therefore unable to determine whether any adjustments might have been found necessary in respect of these entities, and the elements making up the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position and Consolidated Statement of Changes in Equity.

 

Although we have received some of the information requested for the 31 December 2023 audit of the Company, we did not obtain sufficient appropriate audit evidence over several areas of the financial statements that we consider necessary for the purposes of our audit.

 

The possible effects of this inability to obtain sufficient appropriate audit evidence are deemed to be both material and pervasive to the financial statements.

 

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

HQO UK LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE DIRECTORS OF HQO UK LTD
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

Notwithstanding our disclaimer of an opinion on the financial statements, in our opinion, based on the work undertaken in the course of our audit:

 

Matters on which we are required to report by exception

Notwithstanding our disclaimer of an opinion on the financial statements, in the light of the knowledge and understanding of the Group and the Company and their environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatements in the directors' report.

 

Arising from the limitation of our work referred to above:

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

HQO UK LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE DIRECTORS OF HQO UK LTD
- 7 -
Auditor's responsibilities for the audit of the financial statements

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements.

 

Our responsibility is to conduct an audit of the entity's financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor's report.

 

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

 

We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

 

 

Use of our report

This report is made solely to the company’s directors, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s directors those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s directors as a body, for our audit work, for this report, or for the opinions we have formed.

Stephen Haffner
(Senior Statutory Auditor)
For and on behalf of
Harris & Trotter LLP
Chartered Accountants
101 New Cavendish Street
London
W1W 6XH
28 May 2025
HQO UK LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
7,733,213
5,453,243
Cost of sales
(291,961)
(208,673)
Gross profit
7,441,252
5,244,570
Administrative expenses
(11,960,333)
(13,628,541)
Other operating income
16,341
-
Operating loss
4
(4,502,740)
(8,383,971)
Interest receivable and similar income
8
10,741
619
Interest payable and similar expenses
9
(944)
(1,652)
Loss before taxation
(4,492,943)
(8,385,004)
Tax on loss
10
87,450
156,267
Loss for the financial year
(4,405,493)
(8,228,737)
Loss for the financial year is all attributable to the owner of the parent company.
Total comprehensive income for the year is all attributable to the owner of the parent company.
HQO UK LTD
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
26,148,077
28,758,270
Other intangible assets
11
1,837,407
1,296,271
Total intangible assets
27,985,484
30,054,541
Tangible assets
12
111,464
88,090
28,096,948
30,142,631
Current assets
Debtors
15
4,947,263
2,846,880
Cash at bank and in hand
4,054,830
2,915,262
9,002,093
5,762,142
Creditors: amounts falling due within one year
16
(2,581,379)
(1,393,074)
Net current assets
6,420,714
4,369,068
Total assets less current liabilities
34,517,662
34,511,699
Creditors: amounts falling due after more than one year
17
(46,785,259)
(43,608,145)
Deferred income
19
(3,398,602)
(2,164,260)
Net liabilities
(15,666,199)
(11,260,706)
Capital and reserves
Called up share capital
22
100
100
Profit and loss reserves
(15,666,299)
(11,260,806)
Total equity
(15,666,199)
(11,260,706)
The financial statements were approved by the board of directors and authorised for issue on 28 May 2025 and are signed on its behalf by:
28 May 2025
C Garbarino
Director
Company registration number 13027499 (England and Wales)
HQO UK LTD
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
6,594
-
0
Investments
13
33,487,332
32,641,876
33,493,926
32,641,876
Current assets
Debtors
15
3,164,307
1,671,821
Cash at bank and in hand
1,942,064
2,091,792
5,106,371
3,763,613
Creditors: amounts falling due within one year
16
(686,929)
(217,855)
Net current assets
4,419,442
3,545,758
Total assets less current liabilities
37,913,368
36,187,634
Creditors: amounts falling due after more than one year
17
(43,177,922)
(40,920,283)
Deferred income
19
(1,026,627)
(378,178)
Net liabilities
(6,291,181)
(5,110,827)
Capital and reserves
Called up share capital
22
100
100
Profit and loss reserves
(6,291,281)
(5,110,927)
Total equity
(6,291,181)
(5,110,827)

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,180,354 (2022 - £3,488,225 loss).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 28 May 2025 and are signed on its behalf by:
28 May 2025
C Garbarino
Director
Company registration number 13027499 (England and Wales)
HQO UK LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
100
(3,032,069)
(3,031,969)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(8,228,737)
(8,228,737)
Balance at 31 December 2022
100
(11,260,806)
(11,260,706)
Year ended 31 December 2023:
Loss and total comprehensive income
-
(4,405,493)
(4,405,493)
Balance at 31 December 2023
100
(15,666,299)
(15,666,199)
HQO UK LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
100
(1,622,702)
(1,622,602)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(3,488,225)
(3,488,225)
Balance at 31 December 2022
100
(5,110,927)
(5,110,827)
Year ended 31 December 2023:
Loss and total comprehensive income
-
(1,180,354)
(1,180,354)
Balance at 31 December 2023
100
(6,291,281)
(6,291,181)
HQO UK LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
2,566,205
9,758,320
Interest paid
(944)
(1,652)
Income taxes refunded/(paid)
257,741
(111,619)
Net cash inflow from operating activities
2,823,002
9,645,049
Investing activities
Purchase of business
107,655
(6,687,305)
Purchase of intangible assets
(1,098,406)
(440,499)
Purchase of tangible fixed assets
(65,922)
(15,791)
Interest received
10,741
619
Net cash used in investing activities
(1,045,932)
(7,142,976)
Financing activities
Payment of deferred consideration
(151,697)
(288,537)
Net cash used in financing activities
(151,697)
(288,537)
Net increase in cash and cash equivalents
1,625,373
2,213,536
Cash and cash equivalents at beginning of year
2,915,262
704,270
Effect of foreign exchange rates
(485,805)
(2,544)
Cash and cash equivalents at end of year
4,054,830
2,915,262
HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

HqO UK Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is C/O Birketts LLP, One London Wall, Barbican, London, EC2Y 5EA.

 

The group consists of HqO UK Limited and all of its subsidiaries.

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.

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 functional currency of three of the subsidiaries included within these financial statements is the Euro.

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

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company HqO UK Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

At the balance sheet date, following a group net loss of £4.4m (2022 - £8.4m loss), there were group net current assets of £6.4m (2022 - £4.34m) and group net liabilities of £15.7m (2022 - £11.2m). The group 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 £34.7m (2022 - £31.1m) as at 31 December 2023.

HqO Inc, the ultimate parent company, has confirmed in a letter of support that it will neither request the repayment of the outstanding amount at 31 December 2023 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 group to meet its debts as they fall due.

The parent company's audited financial statements for the year ended 31 December 2023 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 2023. Additionally, the US group, of which the group 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.

1.5
Turnover

Turnover comprises the selling of projects, subscriptions and related services to customers, net of discounts and Value Added Tax.

 

Sales for prepaid projects are recognised when they are available for deployment by the client. Prepaid projects that are not ready for deployment by the client are treated as Deferred Income at the year end date.

 

Subscription income is recognised over the period of the contract. Subscriptions invoiced for periods after the year end are treated as Deferred Income at the year end date.

 

 

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.6
Research and development expenditure

The design, development and content assets which give rise to future profits of the business, as a result of online sales generated, are recorded at cost. The economic benefits are estimated to be generated over 3 years.

 

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.8
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:

Survey platform
3 years straight line
1.9
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:

Plant and equipment
3 to 5 years straight line

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 recognised in the profit and loss account.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. 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 group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

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

1.11
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

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.

1.12
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.

1.13
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 group 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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.14
Equity instruments

Equity instruments issued by the group 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 group.

1.15
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.

1.16
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.

1.17
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.18
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 option pricing 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.

 

The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

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.

1.19
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 leased asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are 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
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
2,170,896
1,185,055
Europe
3,426,730
2,939,469
Rest of the World
2,135,587
1,328,719
7,733,213
5,453,243
2023
2022
£
£
Other revenue
Interest income
10,741
619
HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
4
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging/(crediting):
Exchange (gains)/losses
(409,694)
1,991,659
Depreciation of owned tangible fixed assets
41,884
37,337
Amortisation of intangible assets
3,608,423
3,112,837
Share-based payments
66,355
-
Operating lease charges
475,192
400,839
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
43,520
62,500
Audit of the financial statements of the company's subsidiaries
36,500
13,300
80,020
75,800
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Administration
9
8
2
1
Sales
65
55
12
7
Directors
1
1
1
1
Total
75
64
15
9

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
6,298,895
6,107,756
2,080,701
1,450,946
Social security costs
731,913
537,559
304,836
118,578
Pension costs
63,234
32,057
19,279
11,907
7,094,042
6,677,372
2,404,816
1,581,431
HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
156,039
130,592
Company pension contributions to defined contribution schemes
1,321
1,321
157,360
131,913
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
10,741
619
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
488
Other finance costs:
Other interest
944
1,164
Total finance costs
944
1,652
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(143,595)
(156,267)
Foreign current tax on profits for the current period
10,145
-
0
Total current tax
(133,450)
(156,267)
Deferred tax
Origination and reversal of timing differences
46,000
-
0
Total tax credit
(87,450)
(156,267)
HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 24 -

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(4,492,943)
(8,385,004)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 25.00%)
(1,123,236)
(2,096,251)
Tax effect of expenses that are not deductible in determining taxable profit
771,640
708,976
Unutilised tax losses carried forward
429,450
1,614,788
Effect of change in corporation tax rate
(7,537)
129,005
Tax relief on share options
-
0
(279,167)
Losses surrendered for R&D tax credits at a lower rate of tax
(157,767)
(233,618)
Taxation credit
(87,450)
(156,267)
11
Intangible fixed assets
Group
Goodwill
Survey platform
Total
£
£
£
Cost
At 1 January 2023
31,974,350
1,579,002
33,553,352
Additions - internally developed
-
0
1,098,406
1,098,406
Additions - separately acquired
1,440,671
-
0
1,440,671
Revaluation
(999,711)
-
(999,711)
At 31 December 2023
32,415,310
2,677,408
35,092,718
Amortisation and impairment
At 1 January 2023
3,216,080
282,731
3,498,811
Amortisation charged for the year
3,051,153
557,270
3,608,423
At 31 December 2023
6,267,233
840,001
7,107,234
Carrying amount
At 31 December 2023
26,148,077
1,837,407
27,985,484
At 31 December 2022
28,758,270
1,296,271
30,054,541
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.

More information on impairment movements in the year is given in note .

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
12
Tangible fixed assets
Group
Plant and equipment
£
Cost
At 1 January 2023
166,605
Additions
65,922
Exchange adjustments
(1,724)
At 31 December 2023
230,803
Depreciation and impairment
At 1 January 2023
78,515
Depreciation charged in the year
41,884
Exchange adjustments
(1,060)
At 31 December 2023
119,339
Carrying amount
At 31 December 2023
111,464
At 31 December 2022
88,090
Company
Plant and equipment
£
Cost
At 1 January 2023
-
0
Additions
11,928
At 31 December 2023
11,928
Depreciation and impairment
At 1 January 2023
-
0
Depreciation charged in the year
5,334
At 31 December 2023
5,334
Carrying amount
At 31 December 2023
6,594
At 31 December 2022
-
0
HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
33,487,332
32,641,876
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
32,641,876
Additions
1,845,167
Valuation changes
(999,711)
At 31 December 2023
33,487,332
Carrying amount
At 31 December 2023
33,487,332
At 31 December 2022
32,641,876
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Leesman Limited
United Kingdom
Ordinary Shares
100.00
-
Office App International Limited
United Kingdom
Ordinary Shares
100.00
-
Office App B.V.
Netherlands
Ordinary Shares
0
100.00
Symbiosy s.r.o.
Slovakia
Ordinary Shares
100.00
-
Symbiosy Hungary Kft.
Hungary
Ordinary Shares
100.00
-
HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,239,514
2,146,637
2,143,414
865,756
Corporation tax recoverable
143,595
267,886
-
0
-
0
Amounts owed by group undertakings
-
-
158
-
Other debtors
452,436
274,373
166,136
213,584
Prepayments and accrued income
111,718
111,984
8,737
6,719
4,947,263
2,800,880
2,318,445
1,086,059
Deferred tax asset (note 18)
-
0
46,000
-
0
-
0
4,947,263
2,846,880
2,318,445
1,086,059
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
-
845,862
585,762
Total debtors
4,947,263
2,846,880
3,164,307
1,671,821
16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade creditors
530,379
307,108
274,686
31,559
Other taxation and social security
938,533
726,769
201,035
88,640
Other creditors
225,525
86,899
131,837
20,281
Accruals and deferred income
886,942
272,298
79,371
77,375
2,581,379
1,393,074
686,929
217,855
17
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Amounts owed to group undertakings
34,734,592
30,816,001
31,127,255
28,128,139
Other creditors
12,050,667
12,792,144
12,050,667
12,792,144
46,785,259
43,608,145
43,177,922
40,920,283
HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Assets
Assets
2023
2022
Group
£
£
Tax losses
-
46,000
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Asset at 1 January 2023
(46,000)
-
Charge to profit or loss
46,000
-
Asset at 31 December 2023
-
-

The deferred tax asset provided was no longer expected to reverse within 12 months and as a result was released to the profit and loss account.

19
Deferred income
Group
Company
2023
2022
2023
2022
£
£
£
£
Deferred turnover
3,398,602
2,164,260
1,026,627
378,178
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
63,234
32,057

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
21
Share-based payment transactions

The group's parent company's Board of Directors and Shareholders approved the 2015 Stock Option and Grant plan ("the 2015" Plan"), as amended, under which it may grant incentive stock options ("ISOs"), non-qualified stock options ("NSOs"), restricted stock awards, unrestricted stock awards, or restricted stock units to purchase up to 12,880,851 shares of Common Stock to employees, officers, directors and consultants of the Group.

 

Under the 2015 Plan, the group may grant ISOs to employees and NSOs to employees and non-employees to purchase Common Stock in the parent company at specific exercise prices. The exercise price per share for the shares covered by the stock options is determined by the Board of Directors at the time of the grant but cannot be less than 100 percent of the fair market value on the grant date. In the case of an ISO that is granted to a 10 percent owner, the exercise price per share for the shares covered by the ISO cannot be less than 110 percent of the fair market value on the grant date. The Group may also grant restricted stock awards, unrestricted stock awards and restricted stock units to employees or non-employees under the 2015 Plan. Options and awards vest and become exercisable as determined by the parent company's Board of Directors and set forth in the applicable award agreement.

 

The fair value of stock options granted was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions. Expected volatility was based on average volatility for a representative sample of publicly traded companies in the same industry. The risk-free interest rate is based on a zero-coupon United States Treasury instrument with terms consistent with the expected life of the stock options.

 

The parent company has not paid, and does not anticipate paying, cash dividends on shares of Common Stock; therefore , the expected dividend yield is assumed to be zero. The fair value os amortised as compensation on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. The options generally expire ten years after the date on which the option is granted.

 

The following tables show the weighted average exercise price in US Dollars, the currency that the option price will be paid in.

Group
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
$
$
Outstanding at 1 January 2023
215,500
20,000
1.90
1.90
Granted
200,000
197,500
2.19
2.13
Forfeited
(11,334)
(2,000)
2.13
2.13
Outstanding at 31 December 2023
404,166
215,500
2.15
2.11
Exercisable at 31 December 2023
151,466
18,333
2.12
1.90

The options outstanding at 31 December 2023 had an exercise price ranging from $1.90 to $2.19, and a remaining contractual life of between 7 and 10 years.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Share-based payment transactions
(Continued)
- 30 -
Company
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
$
$
Outstanding at 1 January 2023
129,000
20,000
2.09
1.90
Granted
12,500
109,000
2.19
2.13
Outstanding at 31 December 2023
141,500
129,000
2.10
2.09
Exercisable at 31 December 2023
58,495
18,333
2.05
1.90

The options outstanding at 31 December 2023 had an exercise price ranging from $1.90 to $2.19, and a remaining contractual life of between 7 and 10 years.

Group
Company
2023
2022
2023
2022
£
£
£
£
Expenses recognised in the year
Arising from equity settled share based payment transactions
66,355
-
51,744
-
22
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
23
Acquisition of a business

On 27 November 2023 the group acquired 100 percent of the issued capital of both Symbiosy s.r.o and Symbiosy Hungary Fft..

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Trade and other receivables
431,410
-
431,410
Cash and cash equivalents
107,655
-
107,655
Trade and other payables
(134,569)
-
(134,569)
Total identifiable net assets
404,496
-
404,496
Goodwill
1,440,671
Total consideration
1,845,167
The consideration was satisfied by:
£
Share capital in the parent entity
1,845,167
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
72,079
Loss after tax
(172,654)
24
Operating lease commitments
Lessee

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
264,973
178,545
-
15,856
264,973
178,545
-
15,856
25
Events after the reporting date

Office App B.V., part of the HqO UK Group, is no longer engaged in selling its software product as of 31 December 2024. There have been no other significant events affecting the group since the year end.

HQO UK LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
26
Cash generated from group operations
2023
2022
£
£
Loss after taxation
(4,405,493)
(8,228,737)
Adjustments for:
Taxation credited
(87,450)
(156,267)
Finance costs
944
1,652
Investment income
(10,741)
(619)
Amortisation and impairment of intangible assets
3,608,423
3,112,837
Depreciation and impairment of tangible fixed assets
41,884
37,337
Equity settled share based payment expense
66,355
-
Increase in deferred income
1,234,342
864,108
Movements in working capital:
Increase in debtors
(1,839,264)
(620,676)
Increase in creditors
3,957,205
14,748,685
Cash generated from operations
2,566,205
9,758,320
27
Analysis of changes in net funds - group
1 January 2023
Cash flows
Exchange rate movements
31 December 2023
£
£
£
£
Cash at bank and in hand
2,915,262
1,625,373
(485,805)
4,054,830
28
Controlling party

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 38 Chauncy Street, 14th Floor Boston MA 02111, 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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