COMPGEN LIMITED

Credit Opinion: DECLINE COMPGEN LIMITED presents an unacceptable level of credit risk due to severe balance sheet insolvency and a chronic lack of working capital. The company is technically insolvent, with net liabilities exceeding £144,000, and has operated in a deficit position for at least a decade. The financial trajectory is fundamentally deteriorating, with the deficit widening year-on-year. There is no margin of safety for a lender, and the company is entirely dependent on the continued forbearance of its creditors (likely primarily the director) to continue trading. Any extension of credit carries a high probability of default.

Financial Strength: Critically Weak The company’s financial health is severely compromised. As of 31 March 2025, Total Assets stand at a mere £22,915, against Total Liabilities of £166,979 (comprising £160,195 due within one year, £6,104 falling due after one year, and £680 in accruals). This results in negative net assets of £144,064. The company fails the balance sheet test of insolvency. The shareholder deficit has deepened consistently from £35,483 in 2016 to £144,064 in 2025, indicating sustained, accumulated trading losses that have eroded any original equity. The share capital remains nominal at £100, offering no buffer. The micro-entity filing status means profitability is opaque, but the widening deficit confirms ongoing operational losses.

Cash Flow Assessment: Severely Constrained Liquidity is critically impaired. The company has Net Current Liabilities of £142,868, meaning its current liabilities vastly exceed its current assets (£17,327). The business has absolutely no working capital to service short-term external debts. The primary creditor balance of £160,195 due within one year is effectively unpayable from current asset realization. It is highly probable that the majority of this debt is a director's loan account funding the ongoing operational losses. While this means the director is financially invested and unlikely to call in the loan, it also means the business cannot generate sufficient cash from operations to right-size its balance sheet. Cash reserves have historically been negligible, and the business is surviving day-to-day rather than building financial resilience.

Monitoring Points If any exposure is inadvertently taken or forced by existing arrangements, the following require strict monitoring: * Director Loan Account Status: Clarification is required on how much of the £160,195 short-term creditor balance relates to the director's loan. If the director calls this loan, immediate insolvency is triggered. * Trading Viability: The director must provide a viable business plan demonstrating how the company will return to profitability and reduce the £144k deficit. * Creditor Pressure: Any shift in the director's willingness to fund the ongoing losses, or an inability to do so, will result in immediate cessation of trade. * Filing Compliance: The company files as a micro-entity, which severely limits financial transparency. Any downgrade in filing timeliness should be treated as an early warning indicator of distress.