Company Number: 14120660

Analysis Date: 2025-07-29 18:45 UTC

1. Risk Rating: HIGH
   The company presents significant solvency risks with large negative net assets and net current liabilities. The persistent and increasing deficit in shareholders' funds and working capital are key indicators of financial distress.

2. Key Concerns:

• Negative Net Assets and Net Current Liabilities: As of 31 May 2024, AKT Establishments Ltd reported net current liabilities of £35,635 and net assets of -£30,035, indicating that current liabilities exceed current assets by a substantial margin. This undermines the company’s ability to meet short-term obligations.
• Reliance on Director and Related Party Loans: The company depends on interest-free, repayable-on-demand loans from directors and related entities totaling approximately £28,999 at year-end. This suggests liquidity constraints and dependency on insider support rather than sustainable operational cash flows.
• Going Concern Disclaimer: The directors explicitly state that the company can only continue trading with ongoing support from directors and associated companies. This highlights the fragile operational stability and risk if such support is withdrawn.

3. Positive Indicators:

• Timely Filing and Compliance: The company is current with its statutory accounts and confirmation statement filings, showing good regulatory compliance.
• Small Fixed Asset Base with Controlled Depreciation: Fixed assets are modest (£5,600 net) and depreciated on a straight-line basis, implying manageable capital expenditure and no large asset write-down risks.
• Clear Ownership and Control Structure: All significant controllers and directors are identified with no disqualifications or governance flags noted, reducing governance risk.

4. Due Diligence Notes:

• Investigate the nature and terms of director and related party loans for any potential risk of withdrawal or impact on creditor rights.
• Review cash flow projections and operational plans to assess sustainability beyond reliance on insider funding.
• Examine creditor aging and payment practices given the high trade payables and bank borrowings.
• Confirm any contingent liabilities or off-balance sheet obligations not disclosed in the accounts.
• Assess the impact of the negative equity position on supplier and lender confidence and potential covenant breaches.