Equiteq_Advisors_Limited - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

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

Equiteq Advisors Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6th Floor, 9 Appold Street, London, EC2A 2AP.

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

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

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Equiteq M & A Holdings Limited. These consolidated financial statements are available from its registered office, 6th Floor, 9 Appold Street, London, EC2A 2AP.

The company is part of an international group headed by Equiteq M&A Holdings Limited, which operates in several major global markets including UK/EU, US and Asia-Pacific. The group largely operates as one business, sharing resources and financing. If any group company suffers short term resource or cash flow shortages, that demand is met by other group companies. The directors of Equiteq M&A Holdings Limited are also the directors of Equiteq Advisors Limited and have confirmed this support will continue. As such, the Directors going concern assessment for the company is based on the group as a whole.true

The business provides merger, acquisition, and advisory services, primarily to businesses seeking to sell or acquire other businesses. The business earns a mix of non-contingent retainer/advisory fees and contingent success fees. Like most businesses of this nature, success fees are paid immediately on completion of transactions, and therefore collecting cash from income is not a significant risk to the business.

The business’ cost base is primarily its employee costs and associated office costs. Employee

compensation is based on a mix of fixed base salary and benefits, plus a bonus pool directly linked to

success fees and the results of the business, payable only where cash flow allows.

The key going concern risk to the business is therefore the ability to complete transactions of sufficient size and volume, at the required times, to ensure sufficient contingent success fees are earned to cover the fixed cost base as a minimum. Should the business be unable to do this, the business may be unable to pay all its debts as they fall due and may not be a going concern.

The business delivered record revenue and new sales in both 2021 and 2022. Global economic factors saw deals in 2023 being delayed, but not cancelled, leading to an anticipated drop in revenue overall and constrained cash flow during the year. However, the business is finishing 2023 well, with several transactions completing. With a strong work in progress and pipeline coming out of 2023, the business is expected to perform well in 2024.

The occurrence and timing of contingent success fees are by their nature uncertain. The directors make predictions of transactions that will complete, and the resulting success fees, based on current work in progress, pipeline, past conversion rates and knowledge of the market. The directors have used these predictions to prepare profit and loss and cash flow forecasts looking forward to the end of 2023 and 2024. Based on these projections, the directors have a high level of confidence that the business will complete sufficient transactions at the required times, to earn sufficient success fee’s to at least cover the business’ fixed cost base and other outgoings through to the end of 2023 and 2024.

Accordingly, at the time of approving the financial statements, the Directors believe the company can meet its debts as they fall due and continue in operational existence for the foreseeable future. Thus, the Directors have prepared these financial statements on a going concern basis.

The Company engages in mergers and acquisitions advisory services. Turnover comprises revenue recognised by the company in respect of success fee income and retainer fee income net of VAT.

Success fee income represents revenue earned under contracts for the provision of mergers and acquisitions services. Success fee income that is contingent on events outside the control of the firm is recognised when the contingent event occurs, and therefore success fees are recognised on the date of which the buyer purchases the business from the seller. It is measured at the fair value of the right to consideration, which represents amounts chargeable to clients, including expenses and disbursements.

Retainer fees income is recognised as earned when, and to the extent that, the firm obtains the right to consideration in exchange for its performance under these contracts. It is measured at the fair value of the right to consideration, which represents amounts chargeable to clients, including expenses and disbursements.

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of 20 years which is a reflection of management's best estimate for the asset.

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:

This useful economic life has been employed based on management's knowledge of the software and future advancements in the industry.

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:

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.

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.

Basic financial instruments are measured at amortised cost. The company has no other financial instruments or basic financial instruments measured at fair value.

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.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

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

The costs of short-term employee benefits are recognised as a liability and an expense.

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.

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

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

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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.

Provisions and contingent liabilities

Like all businesses of our size, from time-to-time legal claims are made against the company, many of which would be classified as contingent liabilities by FRS102. The directors do not include information about such claims in the financial statements where in their judgement it would be seriously prejudicial to do so.

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

The bank loan is to be repaid in monthly instalments over a 42 month period from the year end and is subject to 3.5% plus base rate of interest per annum.

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

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

The auditor's report was unqualified. The Senior Statutory Auditor who signed the Independent Auditor's Report was Guy Richardson.

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

The disclosure exemption conferred by FRS 102 Section 33:1A has been utilised, whereby the company has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.

At the balance sheet date, the company owed £71,944 (2021: £483,895) to its directors. These amounts are included within other creditors due within one year. Interest of £19,231 (2021: £35,922) has been charged to the company in respect of director loan accounts.

At the balance sheet date, the company was due £4 (2021: £1,212) by its directors. These amounts are included within other debtors falling due within one year. Interest of £nil (2021: £4,069) has been charged by the company to the directors in respect of director loan accounts.

There was also an amount of £nil (2021: £1,712) due to a director of the company, included within trade creditors.

At the balance sheet date, the company owed an amount of £nil (2021: £290,809) to a company of which the directors have significant influence over. These amounts are included within other creditors at the year end.

At the balance sheet date, the directors of the company had advanced personal guarantees to the bankers of Equiteq Advisors Limited amounting to £265,000 (2021: £485,000).

At the balance sheet date, Equiteq M&A Holdings Limited has provided a limited guarantee up to £nil (2021: £265,000) to the bankers of Equiteq Advisors Limited.

The immediate and ultimate parent company is Equiteq M&A Holdings Limited by virtue of its 100% paid up share capital, a company incorporated in England and Wales.