Company Number: 14340315

Analysis Date: 2025-07-20 17:48 UTC

1. Risk Rating: MEDIUM
   The company shows a marked improvement in financial position in the latest year, with positive net current assets and equity, but it remains an early-stage private company with limited operating history and modest share capital. Related party transactions are significant and require scrutiny.

2. Key Concerns:

• Related Party Transactions: Large balances and transactions with related entities (The Really Useful Group Limited and subsidiaries) could indicate dependency or transfer pricing risk.
• Limited Operating History: Incorporated in late 2022, with only two full financial years of trading, limiting trend analysis and increasing uncertainty.
• Low Share Capital and Lack of Audit: Minimal share capital (£2) and exemption from audit limit transparency and raise governance questions, especially given sizeable creditor balances.

3. Positive Indicators:

• Improved Liquidity: Cash at bank increased to £416,995 as of June 2024, improving net current assets to £158,923 from a prior net current liability position.
• Profitability in Latest Year: The company reported a profit of £164,171 for the year ended June 30, 2024, reversing prior losses.
• No Overdue Filings: Both accounts and confirmation statements are filed on time, indicating compliance with statutory requirements.
• No Director Conduct Issues: No disqualifications or concerning director appointments noted; current director has relevant CFO experience.

4. Due Diligence Notes:

• Review the nature and terms of related party transactions to evaluate potential conflicts of interest or risk of unfavorable terms.
• Investigate cash flow sustainability given the high creditor balances and concentration of payables to related parties.
• Assess the company's business model and revenue generation details given the SIC code "Artistic creation" and reliance on royalties and licensing income.
• Confirm the absence of contingent liabilities or off-balance sheet obligations not apparent from the filing.
• Consider requesting management accounts or forecasts to validate going concern assumptions beyond the standard 12 months.