Company Number: 13644986

Analysis Date: 2025-07-20 14:30 UTC

1. Risk Rating: MEDIUM
   The company shows a recent significant increase in liabilities secured by mortgages, leading to net liabilities on the balance sheet. While current assets exceed current liabilities substantially, the large secured debt introduces solvency concerns. The company is relatively new and small, with limited operating history and modest equity.

2. Key Concerns:

• Significant Secured Debt: The company has a large loan of £749,783 secured by property, which exceeds its net assets, resulting in negative shareholders' funds (£-11,375). This poses a solvency risk if the company cannot service this debt.
• Negative Net Assets: Despite positive net current assets, overall net assets are negative due to long-term liabilities, indicating potential financial distress.
• Limited Operating History and Scale: Incorporated in 2021, with only two employees, the company has limited track record to assess operational sustainability and cash flow consistency.

3. Positive Indicators:

• Strong Net Current Asset Position: Current assets of £751,288 exceed current liabilities of £14,025, providing a healthy short-term liquidity buffer.
• No Overdue Filings: The company is compliant with filing deadlines for accounts and confirmation statements, which supports regulatory compliance and governance.
• Directors’ Engagement: Both directors are active, serve as PSCs, and appear to be involved in operational and financial roles, suggesting committed management.

4. Due Diligence Notes:

• Review the terms, interest rates, and repayment schedule of the secured loan to assess refinancing or repayment risks.
• Investigate the nature and valuation of stocks (£734,357) classified as current assets to confirm realizable value and turnover rate.
• Obtain detailed income statement and cash flow data to evaluate profitability and operational cash generation, as only balance sheet data is available.
• Confirm the status and condition of the mortgaged properties securing the debt and any potential liens or encumbrances.
• Assess directors’ advances and any related party transactions for potential conflicts or financial support arrangements.