COATES INNOVATIONS LTD

Risk Rating: HIGH The company exhibits persistent and severe balance sheet insolvency, with net liabilities steadily worsening over the last seven years. Furthermore, the company demonstrates a critical lack of liquidity, holding only £167 in current assets against nearly £20,000 in current liabilities. While regulatory filing compliance is strong, the fundamental financial position indicates a high risk of failure should creditors demand repayment.

Key Concerns: * Balance Sheet Insolvency: The company has been technically insolvent since at least 2019, with net liabilities growing from £3,344 in 2019 to £19,219 in 2025. This persistent erosion of equity indicates a structural inability to generate sufficient profit to clear historical debts. * Critical Liquidity Shortfall: As of 31 March 2025, current assets stand at a mere £167, compared to current liabilities of £19,840. This equates to a current ratio of less than 0.01, meaning the company has virtually no liquid resources to meet its immediate obligations. * Going Concern Viability: The company is trading while insolvent. While it continues to operate, the financial data does not indicate how the company can service its debts or continue as a going concern without external support or creditor forbearance.

Positive Indicators: * Regulatory Compliance: The company is up to date with its statutory filing requirements. The annual accounts and confirmation statements are filed on time and are not overdue, which reduces the risk of administrative strike-off or late filing penalties. * Stable Creditor Position: Between the 2024 and 2025 financial year-ends, total liabilities remained completely flat at £19,840. This suggests that creditors are not actively enforcing debt repayment and the liability may be non-demandable, such as a director's loan. * Low Overhead Structure: As a micro-entity with zero employees, the business operates with minimal fixed overhead. This structure allows the company to remain registered and operational with very little revenue generation required to cover day-to-day costs.

Due Diligence Notes: * Composition of Liabilities: It is crucial to determine who the £19,840 is owed to. If the debt is primarily a director's loan (owed to Catherine Coates), the insolvency risk is largely theoretical, as the director is unlikely to force the company into insolvency to reclaim her own funds. If it is owed to third-party trade creditors or HMRC, the risk of formal insolvency proceedings is significantly higher. * Trading Status vs. Dormancy: The flat asset and liability profiles between 2024 and 2025, alongside zero employees, suggest the company may be largely dormant or operating at a negligible level of activity. Verification of current trading activity and revenue generation is required. * Director's Solvency: Given the company's insolvent status, its continued existence relies heavily on the personal financial position of the sole director, Mrs. Catherine Coates. Any adverse change in her personal circumstances could remove the implicit support allowing the company to continue trading while insolvent.