Company Number: SC795213

Analysis Date: 2025-07-29 19:54 UTC

1. Risk Rating: HIGH
   The company's financial statements reveal significant negative net assets and negative net current assets, indicating insolvency risk despite being a newly formed entity. The liabilities exceed assets by over £13,000, suggesting inability to meet short-term obligations.

2. Key Concerns:

• Negative net assets of £13,140: This indicates the company is technically insolvent on a balance sheet basis at the first reporting date.
• Current liabilities (£26,507) double current assets (£13,400): Negative working capital puts pressure on liquidity and operational continuity.
• No audit performed and micro-entity exemption used: Limited assurance on financial accuracy; risk that issues may be understated or undisclosed.

3. Positive Indicators:

• The company is recently incorporated (January 2024) and currently active with no overdue filings, suggesting compliance with statutory requirements.
• Sole director and 100% shareholder is clearly identified and local to the registered address, which may facilitate governance oversight.
• The company has a small workforce (2 employees), which limits fixed costs and may allow operational flexibility.

4. Due Diligence Notes:

• Investigate the nature and timing of current liabilities to determine if these are trade creditors, loans, or director-related debts, and assess their collectability or settlement terms.
• Clarify the source of ongoing funding or capital injections planned to address the negative equity and working capital deficit.
• Review business model viability and contracts or orders in hand, given the negative financial position in the first accounting period.
• Confirm no undisclosed related party transactions or contingent liabilities that could worsen financial position.
• Assess the director’s capability and track record in managing and growing the business given the current financial stress.