Company Number: 13122858

Analysis Date: 2025-07-20 12:32 UTC

1. Risk Rating: HIGH
   The company shows significant negative net assets and net current liabilities at the latest year end, indicating solvency concerns. The large increase in current liabilities relative to current assets and continued negative net asset position suggest financial distress.

2. Key Concerns:

• Solvency Risk: Net liabilities of approximately £461k at June 2024 with net current liabilities of a similar magnitude indicate potential inability to meet short-term obligations.
• Liquidity Issues: Cash on hand has decreased materially from £157k to £62k, while current liabilities have increased substantially, implying cash flow pressure.
• Related Party Transactions: Large balances with related entities (Hermes Systems Ltd, Eagle Europe Ltd, Wavetree Ltd) create potential conflicts and contingent risks if these parties face financial difficulties or if intercompany settlements are delayed or impaired.

3. Positive Indicators:

• The company is current with its filings and has maintained active status since incorporation in 2021.
• Increasing trade debtors suggest some revenue growth or customer base expansion, consistent with industry (software development).
• Staff numbers have increased from 11 to 14, which may indicate operational growth or investment in capability.

4. Due Diligence Notes:

• Review detailed profit and loss figures which were not filed, to assess profitability trends and underlying causes of losses.
• Investigate the nature and collectability of trade debtors and related party balances to assess real liquidity and credit risk.
• Evaluate repayment terms and contractual obligations relating to current liabilities, especially accruals and deferred income which have doubled year-on-year.
• Assess governance and control arrangements given multiple related party companies with overlapping ownership and director influence.
• Confirm any contingent liabilities or guarantees not reflected on the balance sheet.