Company Number: 12611450

Analysis Date: 2025-07-20 15:46 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity risk with current liabilities vastly exceeding current assets, leading to persistent negative net current assets over multiple years. The substantial director loans classified as interest-free and repayable on demand suggest potential cash flow dependency on these individuals, raising solvency concerns.

2. Key Concerns:

• Liquidity Deficiency: Net current liabilities of approximately £105,571 as of the latest year-end indicate difficulty meeting short-term obligations without relying on additional financing or asset disposals.
• Director Loan Reliance: Over £110,000 owed to directors, interest-free and repayable on demand, signals potential operational cash flow issues and dependence on director funding, which may not be sustainable.
• Limited Asset Liquidity: The principal fixed asset is a single investment property valued at £152,726 with no evidence of revaluation gains since purchase in 2022; this restricts quick liquidity generation if required.

3. Positive Indicators:

• Shareholders’ Funds Positive: Despite liquidity pressures, total equity remains positive at £47,155, showing that the company is not insolvent on a balance sheet basis.
• No Overdue Filings: Accounts and confirmation statements are up to date, indicating compliance with statutory obligations and good governance practices.
• Stable Ownership and Control: Directors and significant controllers have longstanding involvement with clear control structures, reducing governance uncertainty.

4. Due Diligence Notes:

• Investigate the nature and terms of director loans, including any informal agreements and potential risks if directors withdraw funding.
• Review cash flow forecasts and banking arrangements to assess the company’s ability to meet short-term liabilities without additional director support.
• Examine the valuation basis and marketability of the investment property to understand realistic liquidation value and timeframe.
• Evaluate revenue streams and business plan viability to determine operational sustainability given the liquidity strain.
• Confirm absence of contingent liabilities or legal disputes that may exacerbate financial risk.