Risk Assessment: BANTHAM TECHNOLOGIES LIMITED

1. Risk Rating: HIGH

Justification: The company is currently in liquidation status and exhibits catastrophic financial deterioration. Net liabilities have ballooned to £621,640 as of December 2023, representing a swing of over £1 million in net assets over three years. Cash reserves are virtually depleted at £2,356 against current liabilities of nearly £594,000. This company has failed as a going concern.

2. Key Concerns

Concern 1: Liquidation Status

The company status is confirmed as "Liquidation," indicating formal closure proceedings are underway. This is the terminal risk indicator—any investment or credit exposure would face total loss unless preferential creditor status exists. The company is no longer operating as a viable entity.

Concern 2: Catastrophic Financial Deterioration

The trajectory from 2020 to 2023 is alarming:

The company moved from a healthy net asset position to severe insolvency in just three years. Accumulated losses reached £621,749 in the P&L reserve, with a loss of £521,586 in 2023 alone and £312,192 in 2022. The cash position collapsed from £338,613 to £2,356—a 99.3% decline.

Concern 3: Severe Liquidity Crisis and Insolvency

Current liabilities (£593,996) exceed current assets (£2,356) by a ratio of approximately 252:1. The company has virtually no working capital, with net current liabilities of £591,640. Trade creditors stand at £184,092, taxation and social security at £195,270, and other creditors at £154,612—suggesting multiple stakeholder groups are owed significant sums with minimal prospect of recovery.

3. Positive Indicators

Limited positive indicators exist given the liquidation status, however:

• Historical Profitability: The company demonstrated viability through 2020, with net assets of £466,067 and strong cash reserves, suggesting the underlying business model (IT consultancy) had commercial merit at some point.
• Employee Growth: Headcount increased from 7 to 9 in 2023, indicating some operational activity continued during the period, though this may have contributed to cash burn.
• Filing Compliance (Historical): The company maintained accounts filings through December 2023, providing transparency into its deteriorating position.

4. Due Diligence Notes

Critical Investigations Required:

1. Nature of Liquidation: Determine whether this is a voluntary (members' or creditors') or compulsory liquidation. This will indicate whether directors initiated an orderly wind-down or were forced into proceedings by creditors.

2. Related Party Transactions: The PSC structure is complex—Bantham Radar Limited owns 75%+ with additional overlapping control by Mr. Belgeonne and Mr. Cooper. Investigate whether the £154,612 in "other creditors" or the dramatic asset depletion involves related party transactions, particularly given Bantham Radar Limited's position.

3. Debtor Write-offs: Debtors fell from £342,140 (2022) to £0 (2023). This requires explanation—was this a bad debt provision, write-off, or transfer to a related entity? The scale suggests potential connected party issues.

4. Director Conduct: Assess whether Mr. Belgeonne and Mr. Sheppard fulfilled their fiduciary duties during the period of rapid deterioration, particularly regarding wrongful trading provisions under the Insolvency Act 1986.

5. Tangible Asset Disposal: Fixed assets were fully depreciated in 2023 (carrying value £0 vs £11,363 in 2022). Clarify whether assets were sold, scrapped, or transferred and at what terms.

6. Overdue Filings: Both the confirmation statement and accounts are overdue. While accounts are authorized (dated 26 February 2025), the late filing during liquidation raises governance concerns.

7. Name Change Context: The company rebranded from City Soft Limited in December 2020—coinciding with the onset of financial deterioration. Investigate whether this reflected a business pivot that failed or a restructuring with implications for creditors.