Company Number: 13635897

Analysis Date: 2025-07-29 19:41 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risk as evidenced by negative shareholders' funds (£-23,479) and current liabilities (£197,948) exceeding current assets (£138,959). This indicates an inability to fully cover short-term obligations with liquid assets. The rapid increase in liabilities within one year is a red flag.

2. Key Concerns:

   • Negative Net Worth: The company’s shareholders’ funds turned negative in 2023, reflecting accumulated losses or capital erosion, which threatens its financial stability.
   • Liquidity Shortfall: Current liabilities outstrip current assets by approximately £59,000, suggesting potential cash flow challenges to meet immediate obligations.
   • Director Turnover: There have been multiple director changes within a short period (three directors appointed/resigned since 2021), which could imply governance instability or internal issues.

3. Positive Indicators:

   • Recent Asset Investment: The company acquired fixed assets worth £49,814 in the latest financial year, indicating ongoing business development or capacity expansion.
   • Filing Compliance: No overdue filings for accounts or confirmation statements, demonstrating regulatory compliance and up-to-date statutory reporting.
   • Employment Growth: Average number of employees increased from 0 to 2, suggesting operational activity ramp-up.

4. Due Diligence Notes:

   • Investigate the reasons behind the substantial increase in current liabilities and whether these are sustainable or related to short-term borrowing.
   • Review cash flow statements (not provided) to assess liquidity management and ability to meet obligations as they fall due.
   • Understand the nature of fixed assets acquired and whether these represent productive investment or potential illiquid assets.
   • Examine governance and management stability given the director resignations and appointments, including the impact on strategic direction.
   • Confirm the company’s contract pipeline and revenue prospects to evaluate operational sustainability beyond balance sheet figures.
   • Verify any related-party transactions, especially given the shared addresses among directors and PSCs.