CARE NETWORX LTD

Executive Summary

Care Networx Ltd exhibits a high risk profile due to ongoing negative net assets, increasing current liabilities, and lack of profitability evidence in its initial years. While regulatory compliance is maintained and cash levels have improved, the company faces significant solvency and liquidity challenges that warrant close scrutiny. Further investigation into its liabilities, revenue generation, and capital structure is essential before considering investment.

CARE NETWORX LTD - Analysis Report

Company Number: 14128957

Analysis Date: 2025-07-29 16:26 UTC

1. Risk Rating: HIGH
   Justification: The company shows persistent net liabilities and negative shareholders' funds over its first two years of operation, indicating an ongoing capital deficiency. Additionally, net current liabilities have increased substantially in the latest financial year, reflecting an inability to cover short-term obligations with current assets despite a recent increase in cash balance.

2. Key Concerns:

• Solvency Risk: The company’s net assets are negative (£-10,861 as of 31 May 2024), indicating it is insolvent on a balance sheet basis. The deficit has worsened compared to prior years.
• Liquidity Concerns: Current liabilities have increased markedly from £11,161 in 2023 to £42,640 in 2024, while net current assets remain negative (£-10,861). Although cash increased to £30,779, it is insufficient relative to liabilities, and the bulk of creditors are short-term.
• Operational Stability: The company has only two employees and minimal turnover information was disclosed. Persistent losses and negative reserves suggest difficulties in achieving sustainable profitability or operational scale.

3. Positive Indicators:

• The company is compliant with filing deadlines for accounts and confirmation statements, showing regulatory diligence.
• Cash holdings have increased significantly in the latest year, which could suggest some recent capital injection or improved cash management.
• The single director (and sole significant controller) has maintained direct oversight since incorporation, which may facilitate swift decision-making.

4. Due Diligence Notes:

• Investigate the nature and terms of the increased current liabilities, especially the £36,587 other creditors and £6,053 taxation & social security liabilities, to assess payment schedules and creditor relationships.
• Review recent trading performance and revenue streams, as turnover figures are not disclosed; understanding revenue trends is critical to assessing going concern prospects.
• Clarify the source of the increased cash balance and whether it reflects new equity, loans from related parties, or operational cash flow.
• Assess any off-balance-sheet liabilities or contingent risks not captured in these accounts.
• Evaluate the director’s plans for addressing the negative equity and whether there are strategies for capital restructuring or business model adjustments.