Company Number: SC711657

Analysis Date: 2025-07-20 11:02 UTC

1. Risk Rating: HIGH
   Justification: The company shows negative net assets (shareholders funds) of £29,736 as at 31 October 2023, worsening from a negative £39,608 the previous year, indicating insolvency on a balance sheet basis. Current liabilities significantly exceed current assets, suggesting liquidity stress.

2. Key Concerns:

• Negative net assets imply the company’s liabilities exceed its assets, a solvency red flag.
• Current liabilities (£356,538) are more than four times current assets (£75,783), indicating poor short-term liquidity and potential cash flow difficulties.
• The company has sustained losses over at least two years (negative shareholders funds), raising questions about operational viability and sustainability.

3. Positive Indicators:

• The company is current with all filing obligations (accounts and confirmation statements), suggesting regulatory compliance and governance discipline.
• Fixed assets increased significantly from £68,444 to £251,019, which may indicate recent investment in property or equipment supporting business operations.
• The director and sole significant controller is clearly identified, providing transparency on governance.

4. Due Diligence Notes:

• Investigate the nature and valuation of fixed assets to confirm they are not overstated and can support business operations or refinancing.
• Review cash flow statements and profit & loss accounts (not provided here) to understand operational cash generation or losses.
• Clarify the composition and timing of current liabilities to assess liquidity pressures and creditor relationships.
• Assess business model sustainability, given persistent negative equity and whether losses are expected to continue or are temporary.
• Enquire about any contingent liabilities or off-balance-sheet risks not disclosed in micro-entity accounts.
• Confirm if any external funding or guarantees are in place to support the business in the short term.