CLASS-IFY HEALTH AND WELLNESS LTD

Executive Summary

CLASS-IFY HEALTH AND WELLNESS LTD has experienced a significant deterioration in financial position in its latest year, moving to negative equity and working capital deficits. While the company remains active with no filing issues, liquidity pressures and reliance on director loans raise concerns. Conditional credit approval is recommended pending evidence of improved cash flow, equity restoration, and stable management oversight.

CLASS-IFY HEALTH AND WELLNESS LTD - Analysis Report

Company Number: 12796667

Analysis Date: 2025-07-20 14:50 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CLASS-IFY HEALTH AND WELLNESS LTD shows signs of financial stress in the latest fiscal year (2024) with net liabilities of £30,003 and negative shareholders’ funds of approximately £1.83 million. This is a sharp decline from the prior two years when the company reported positive net assets and strong equity positions. The company’s current liabilities exceed current assets, resulting in negative working capital of £51,366, indicating liquidity pressures. However, the company remains active, has no overdue filings, and operates in growth sectors (software development and health activities). The recent departure of two directors in August 2024 may represent governance changes that require monitoring. Credit approval should be conditional on updated management accounts, evidence of cash flow recovery, and clarification of the strategy to restore equity and positive working capital.

2. Financial Strength:
   The balance sheet at 31 August 2024 reveals a concerning deterioration. Fixed assets (£113,527) are modest and include investments (£108,000) and tangible assets (£5,527). Current assets have fallen significantly to £66,622 (all cash) with no debtors, contrasting with prior years where cash and debtors exceeded £300k. Current liabilities are £117,988, mainly including loans from directors (£52,642), taxes/social security (£38,849), and trade creditors (£3,731). There are also long-term loans of £92,164, up from £57,837 in 2023, increasing overall leverage. The company’s equity balance shifted from a positive £173k in 2023 to negative £30k in 2024, primarily due to a significant increase in the accumulated loss (profit and loss account at -£1.83m). This indicates the company has been incurring losses or writing down assets that have eroded net worth.

3. Cash Flow Assessment:
   The company’s liquidity position is weak. Cash balances dropped from £275,831 in 2023 to £66,622 in 2024. The absence of trade debtors suggests reduced credit sales or collection of receivables, but the negative net current assets position indicates that short-term liabilities exceed liquid assets, potentially impairing day-to-day operational cash flow. Loans from directors and other creditors are significant and may indicate reliance on related party funding rather than external financing. Without positive working capital, the company is at risk of cash flow shortfalls, which must be managed closely.

4. Monitoring Points:

• Improvement in working capital and liquidity metrics in subsequent periods.
• Stabilisation or reversal of the negative equity trend through profitability or capital injection.
• Management changes and impact on governance and strategic direction following resignation of two founding directors.
• Cash flow forecasts and actual cash conversion cycles to assess operational cash management.
• Ability to service director loans and other creditor obligations without further strain.
• Any upcoming filings or disclosures that provide insight into operational performance or restructuring plans.