Company Number: 14589918

Analysis Date: 2025-07-29 19:35 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns as evidenced by its substantial net current liabilities and negative shareholders’ funds within its first reporting period.

2. Key Concerns:

• Liquidity Deficit: Net current liabilities stand at approximately £1.82 million, indicating the company’s current liabilities exceed its current assets by a large margin, posing a risk to short-term cash flow management.
• Solvency and Negative Equity: The company reports net liabilities of £10,548 and negative shareholders’ funds, suggesting it is technically insolvent on a balance sheet basis despite holding significant investment property assets.
• Related Party Debt: A material creditor balance of £2.14 million is owed to directors, indicating reliance on director funding rather than third-party financing, which may affect financial stability and governance.

3. Positive Indicators:

• Substantial Investment Property Asset: The company holds investment property valued at £4.5 million, which is the main asset and potentially provides collateral for bank loans.
• No Overdue Filings: The company is compliant with regulatory filing deadlines for accounts and confirmation statements, suggesting disciplined administrative and governance practices.
• Going Concern Assertion: Directors have stated confidence in continued funding from shareholders, which, if reliable, supports operational continuity.

4. Due Diligence Notes:

• Verify the nature and terms of the £2.69 million bank loans secured against the investment property, including repayment schedules and covenant compliance.
• Assess the directors’ capacity and willingness to continue providing financial support given the high related party creditor balance.
• Review rental income generation and occupancy levels of the investment property to evaluate operational cash flow sustainability.
• Confirm the fair valuation process for the investment property and any risks of impairment or market volatility impacting asset values.
• Investigate any contingent liabilities or off-balance-sheet obligations that may not be disclosed.