AUTOMATED COMMERCE EXCHANGE LIMITED

Executive Summary

Automated Commerce Exchange Limited demonstrates significant financial strain, highlighted by persistent negative equity, a critical working capital shortfall, and substantial related party debts. While the company remains compliant with filings and invests in intangible assets, the current liquidity and solvency risks are high and warrant careful scrutiny of related party transactions and future cash flow viability. Continued director support is noted but may not fully mitigate the underlying financial challenges.

AUTOMATED COMMERCE EXCHANGE LIMITED - Analysis Report

Company Number: 12830174

Analysis Date: 2025-07-29 17:30 UTC

1. Risk Rating: HIGH
   The company exhibits a high risk profile primarily due to its persistent negative net assets, severe working capital deficiency, and substantial related party creditor balances. These financial stress indicators suggest significant solvency and liquidity concerns.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company’s net assets stand at approximately -£39,000 as of September 2024, reflecting accumulated losses and an erosion of equity, which undermines solvency.
• Severe Working Capital Deficit: Current liabilities (£432,290) far exceed current assets (£3,883), resulting in a net current liability of over £428,000. This indicates an inability to meet short-term obligations from available liquid resources, posing liquidity risk.
• High Related Party Creditors: The company owes significant sums to related parties, notably £353,015 to Instant Access Europe and £30,970 to director Mr. M Cole, which may indicate reliance on director/company loans for funding and potential conflicts of interest.

3. Positive Indicators:

• Active Status and Timely Filings: The company is currently active with no overdue accounts or confirmation statements, indicating compliance with statutory filing requirements.
• Increasing Fixed Assets (Intangible): Intangible fixed assets increased to £460,555, possibly reflecting ongoing capitalised development costs, suggesting investment in product development and potential future revenue streams.
• Directors’ Support and Going Concern Statement: Directors indicate continued financial support, which could provide short-term operational stability despite current financial stress.

4. Due Diligence Notes:

• Investigate the nature and terms of the large related party creditor balances, especially with Instant Access Europe, to assess repayment risk and potential contingent liabilities.
• Review management accounts and cash flow forecasts to evaluate the company’s cash generation capability and any plans to reduce working capital deficits.
• Assess the recoverability and valuation basis of capitalised intangible assets to determine if impairment risks exist that could further weaken the balance sheet.
• Confirm the extent and conditions of directors’ financial support and whether this is sustainable long term or merely a temporary measure.
• Verify if there are any disclosed contingent liabilities or pending litigation not evident in the accounts that could affect solvency.