Company Number: SC703710

Analysis Date: 2025-07-20 15:57 UTC

1. Risk Rating: HIGH
   Justification: The company shows persistent negative net assets and significant long-term liabilities exceeding total assets, indicating solvency concerns. Although it is a micro-entity with minimal filing requirements, the financial position points to potential financial distress.

2. Key Concerns:

• Negative Net Assets: The company’s net liabilities increased from approximately £76k in 2023 to about £90k in 2024, signaling an erosion of equity and potential solvency issues.
• High Long-Term Creditors: Creditors falling due after more than one year stand at £681,889, which significantly exceeds the company’s total assets, representing a structural imbalance in financing and risk of inability to meet obligations.
• Limited Liquidity Cushion: Current assets (£112,632) are much lower than current liabilities (£681,889) on a total basis, though the current liabilities within one year appear low (£10,816). The majority of the liabilities are long-term, but the mismatch raises concerns about cash flow management and refinancing risk.

3. Positive Indicators:

• Stable Fixed Asset Base: The company holds considerable fixed assets (~£489k), which could provide collateral value or operational capacity.
• Current Assets Slightly Improved: Current assets increased slightly from £102k to £112k year-on-year, indicating some stability in short-term resources.
• Compliance: The company is up to date with its filing obligations (accounts and confirmation statements not overdue), reflecting good regulatory compliance.

4. Due Diligence Notes:

• Investigate the nature, terms, and maturity profile of the significant long-term creditors to assess refinancing risk and creditors’ willingness to extend terms.
• Review cash flow forecasts and working capital management to determine how the company plans to meet its obligations given the negative net assets.
• Obtain details on the fixed assets to understand their liquidity and operational role, including whether they are encumbered as security against borrowings.
• Clarify the company’s business model under SIC 96090 (“Other service activities not elsewhere classified”) to assess operational sustainability.
• Confirm whether the directors or related parties have provided guarantees or additional funding to support the company’s financial position.
• Evaluate any contingent liabilities or off-balance-sheet risks not visible in the micro-entity filings.