Company Registration No. 10866153 (England and Wales)
WERQWISE (UK) LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
WERQWISE (UK) LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Statement of changes in equity
3
Notes to the financial statements
4 - 12
WERQWISE (UK) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 1 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
4
15,288,578
12,043,360
Current assets
Debtors
6
29
24
Cash at bank and in hand
11,413
21,489
11,442
21,513
Creditors: amounts falling due within one year
7
(1,735,219)
(2,184,707)
Net current liabilities
(1,723,777)
(2,163,194)
Total assets less current liabilities
13,564,801
9,880,166
Creditors: amounts falling due after more than one year
8
(3,099,799)
(4,662,516)
Net assets
10,465,002
5,217,650
Capital and reserves
Called up share capital
9
6,233,097
6,242,356
Share premium account
9
5,038,743
Capital redemption reserve
9
9,475
Profit and loss reserves
(816,313)
(1,024,706)
Total equity
10,465,002
5,217,650
The Directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 31 December 2022 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.
WERQWISE (UK) LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2022
31 December 2022
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 5 March 2024 and are signed on its behalf by:
N Khugputh
Director
Company Registration No. 10866153
WERQWISE (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2021
6,242,332
(702,785)
5,539,547
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
-
(321,921)
(321,921)
Issue of share capital
24
-
-
24
Balance at 31 December 2021
6,242,356
(1,024,706)
5,217,650
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
208,393
208,393
Issue of share capital
9
216
5,038,743
-
-
5,038,959
Reduction of share capital
9
(9,475)
9,475
-
Balance at 31 December 2022
6,233,097
5,038,743
9,475
(816,313)
10,465,002
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
1
Accounting policies
Company information
Werqwise (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Fifth Floor, Clareville House, 26-27 Oxendon Street, St James's, London, SW1Y 4EL.
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 functional currencies of the company are both Sterling and the US dollar, as costs and finance are in both currencies. These financial statements have been presented in Sterling as the company is a UK company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. 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 financial statements 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.
1.2
Going concern
Atruet the time of approving the financial statements, the Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future with the support of its shareholders and creditors. Thus the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
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.
1.4
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.
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 5 -
1.5
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 balance sheet 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.
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.
1.6
Convertible loan notes
Convertible loan notes are convertible at the loan note holders' option and bear 12% interest. These are reflected as debt.
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 6 -
1.7
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.
Where equity instruments, including preference share capital, contain both a liability and an equity component, the proceeds from the equity instruments are allocated into their liability and equity components and presented separately in the balance sheet.
The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that did not include an equity component. This is then measured at amortised cost.
The difference between the net proceeds of equity instruments with liability components and the amount allocated to the debt component is credited direct to equity and is not subsequently re-measured.
1.8
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 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 company’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 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.
1.9
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.
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’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
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Total
4
Fixed asset investments
2022
2021
£
£
Investments
4,008,213
3,472,846
Loans
11,280,365
8,570,514
15,288,578
12,043,360
Interest of 5% (2021: 5%) per annum accrues on the loans.
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
5
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
1. Werqwise USA Inc
USA
Ordinary and preference shares
100.00
-
2. Werqwise One, LLC
USA
Ordinary shares
-
100.00
3. Werqwise, Inc
USA
Ordinary shares
-
100.00
4. San Mateo One LLC
USA
Ordinary shares
-
100.00
Registered office addresses:
1
108 W 13th Street, Wilmington, New Castle, DE 19801
2
149 New Montgomery St., San Francisco, CA 94105
3
149 New Montgomery St., San Francisco, CA 94105
4
149 New Montgomery St., San Francisco, CA 94105
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
1. Werqwise USA Inc
2,752,452
(723,555)
2. Werqwise One, LLC
(1,569)
-
3. Werqwise, Inc
(11,748,439)
(492)
4. San Mateo One LLC
-
-
6
Debtors
2022
2021
Amounts falling due within one year:
£
£
Other debtors
29
24
7
Creditors: amounts falling due within one year
2022
2021
£
£
Unsecured loan notes
1,096,873
1,314,650
Trade creditors
1,617
1,447
Amounts due to group undertakings
636,427
263,244
Other creditors
302
605,366
1,735,219
2,184,707
The unsecured loan notes accrue interest at a rate of 12% (2021: 12%) per annum on the principal amount outstanding.
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
8
Creditors: amounts falling due after more than one year
2022
2021
£
£
Unsecured loan notes
2,465,228
4,108,470
Debt component of preference shares
634,571
554,046
3,099,799
4,662,516
At 31 December 2021, the company recognised convertible loan notes within the unsecured loan notes creditor. The convertible loan notes accrued interest at 12% per annum, were treated as a liability, were denominated in USD and amounted to £1,969,438 at 31 December 2021. The convertible loan notes were converted into A Ordinary shares during the year ended 31 December 2022; further details are provided in Note 9.
The preference shares entitled the holders to receive a dividend. During the year ended 31 December 2022, the company's Articles were amended to remove this entitlement to receive a dividend in respect of any period after 9 March 2022.
The debt component of the preference shares has been discounted to net present value using an effective interest rate of 14% and the movement during the year represents the unwinding of that discount.
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
9
Called up share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
585,854 (2021: 331,000) A Ordinary shares of 0.075p (2021: 0.075p) each
458
248
205,500 (2021:206,000) B Ordinary shares of 0.0742p (2021: 0.0742p) each
153
153
358,250 (2021: 358,250) C Ordinary shares of 0.066p (2021: 0.066p) each
240
240
5,799,623,000 (2021: 5,799,623,000) D Shares of 0.0746p (2021: 0.0746p) each
4,329,101
4,329,101
21,849 (2021: 20,000) E Shares of 0.075p (2021: 0.075p) each
16
15
5,750 (2021: Nil) Deferred shares of 0.08p each
5
-
4,329,973
4,329,757
Preference share capital
Issued and fully paid
2,399,899 (2021: 2,399,899,000) A Preference shares of 74.8p (2021: 0.0748p) each
1,786,545
1,796,020
542,792 (2021: 555,292,000) B Preference shares of 75.8p (2021: 0.0758p) each
420,844
420,844
2,207,389
2,216,864
Preference shares classified as equity
1,903,124
1,912,599
Preference shares classified as liabilities
304,265
304,265
2,207,389
2,216,864
The nominal value of the shares is denominated in US Dollars; these are recognised at the sterling value at date of share issue.
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Called up share capital
(Continued)
- 11 -
Details of share consolidation
On 27 June 2022, 2,399,899,000 A Preference shares with a nominal value of $0.001 per share were consolidated into 2,399,899 A Preference shares with a nominal value of $1.00 per share.
On 27 June 2022, 555,292,000 B Preference shares with a nominal value of $0.001 per share were consolidated into 555,292 B Preference shares with a nominal value of $1.00 per share.
Shares allotted during the year
On 30 June 2022, the company issued 170,394 A Ordinary shares with a nominal value of $0.001 per share. The total consideration for the shares was £3,405,444, of which £3,405,304 represents a premium over the nominal value of the shares and which has been added to the share premium account. The share purchase was made via the settlement of unsecured loan notes issued by the company and accrued interest totalling £3,405,444.
On 18 July 2022, the company issued 84,460 A Ordinary shares with a nominal value of $0.001 per share. The total consideration for the shares was £1,633,509, of which £1,633,439 represents a premium over the nominal value of the shares and has been added to the share premium account. The share purchase was made via the settlement of an unsecured loan note totalling £96,345 and cash of £1,537,164.
On 18 July 2022, the company issued 1,849 E shares for their nominal value of $0.001 per share.
On 18 July 2022, the company issued 5,750 Deferred shares for their nominal value of $0.001 per share.
Shares cancelled during the year
On 18 July 2022, the company cancelled 500 B Ordinary shares and 12,500 B Preference shares with a nominal value of $1.00 per share. The nominal value of the cancelled shares has been added to a capital redemption reserve.
Description of each class of share
A, B and C Ordinary shares: One vote per Ordinary share, no right to receive a dividend. If the company has sufficient distributable profits, a dividend may be paid on the Ordinary shares (together with the D Shares) in accordance with the Articles of Association at the discretion of the board of directors of the company. No preference on a return of capital on liquidation or otherwise, the Ordinary shares rank behind the A Preference shares (in respect of any unpaid dividends), and rank with the other Ordinary shares, the B Preference shares and the D Shares in accordance with the Articles of Association. No rights of redemption.
A Preference shares: No voting rights. The A Preference shares confer the right to receive a fixed cumulative preference dividend on each A Preference share each year. Have a preference in respect of unpaid dividends on a return of capital on liquidation or otherwise and otherwise rank with the Ordinary shares, the D Shares and the B Preference shares in accordance with the Articles of Association. The A Preference shares shall be redeemable by the company.
B Preference shares: No voting rights. No rights to participate in any dividend. No preference on a return of capital on liquidation or otherwise, the B Preference shares rank behind the A Preference shares (in respect of any unpaid dividends), and rank with the Ordinary shares and the D Shares in accordance with the Articles of Association. The B Preference shares shall be redeemable by the company.
WERQWISE (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Called up share capital
(Continued)
- 12 -
Description of each class of share (continued)
D Shares: No voting rights. No right to receive a dividend. If the company has sufficient distributable profits, a dividend may be paid on the D Shares (together with the other Ordinary shares) in accordance with the Articles of Association at the discretion of the board of directors of the company. No preference on a return of capital on liquidation or otherwise, the D Shares rank behind the A Preference shares (in respect of any unpaid dividends), and rank with the Ordinary shares and the B Preference shares in accordance with the Articles of Association. No rights of redemption.
E Shares: No voting rights. No right to receive a dividend. If the company has sufficient distributable profits, a dividend may be paid on the E Shares (together with the D Shares and the Ordinary shares) in accordance with the Articles of Association at the discretion of the board of directors of the company. No preference on a return of capital on liquidation or otherwise, the E Shares shall convert to B Preference shares immediately before any return of capital and so shall rank behind the A Preference shares (in respect of any unpaid dividends) and rank with the Ordinary shares and the D Shares in accordance with the Articles of Association. The E Shares shall be redeemable by the company.
Deferred Shares: No voting rights. No right to receive a dividend. On a return of capital on liquidation or otherwise, the Deferred shares shall rank behind the A Preference shares (in respect of any unpaid dividends) and the deferred shareholders shall be entitled to US$1 to be divided between them on a proportionate basis. The Deferred shares shall be redeemable and cancellable by the company.
A Preference shares
The A Preference shares provide the company with the option to redeem the shares and the obligation to pay a non-discretionary dividend and are therefore considered to contain both a liability and equity component. The nominal value of the A preference shares is $2,399,899, which translated to £1,796,020 at the point of issue. Of this amount, £1,491,755 was attributed to the equity component and is included in share capital. The balance of £304,265 was attributed to the debt component and is included within Creditors: amounts falling due after one year as “Debt component of preference shares.”
10
Directors' transactions
Included in the unsecured loan note creditors is £2,646,796 (2021: £2,317,498) due to a company which is related due to a common director. Interest charged on the loan totaled £303,956 (2021: £213,848).
Included in the unsecured loan note creditors is £110,881 (2021: £104,413) due to a director of the company. Interest on the loan totaled £13,151 (2021: £14,829).
Included in the unsecured loan note creditors is £9,918 (2021: £9,918) due to a director of the company. Interest on the loan totaled £101 (2021: £1,604).
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