CROSS WATER DEVELOPMENTS LIMITED

Executive Summary

Cross Water Developments Limited demonstrates significant financial distress characterized by negative net assets and current liabilities exceeding current assets, signaling high solvency and liquidity risks. The company’s going concern status is contingent upon continued director support, underscoring operational vulnerabilities. However, compliance with filing requirements and clear ownership structure provide some assurance regarding governance and potential remedial actions.

CROSS WATER DEVELOPMENTS LIMITED - Analysis Report

Company Number: 13910900

Analysis Date: 2025-07-29 17:09 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits persistent net liabilities and negative working capital over the last three financial periods, indicating ongoing solvency and liquidity challenges. The balance sheet shows increasing net losses and shareholder deficits, which raises concerns about the company’s ability to meet short-term obligations without external support.

2. Key Concerns:

• Negative Net Current Assets: The company has net current liabilities of £8,107 as of May 2024, worsening from £5,456 in the previous year, indicating liquidity stress.
• Net Liabilities and Negative Shareholders’ Funds: Shareholders’ funds are negative at £9,107, reflecting accumulated losses and undercapitalization.
• Reliance on Directors’ Support: The directors’ report explicitly states the going concern basis depends on ongoing director support, suggesting vulnerability if such support is withdrawn.

3. Positive Indicators:

• No Filing or Compliance Issues: All accounts and confirmation statements are filed timely, with no overdue returns or penalties indicated.
• Stable Employee Base: The company maintains a small but consistent number of employees (2 including directors), implying operational continuity.
• Clear Ownership and Governance: One individual controls 75-100% of shares and voting rights, simplifying decision-making and potential capital injections if needed.

4. Due Diligence Notes:

• Review Directors’ Support Arrangements: Investigate the nature, terms, and sustainability of the director funding/support that underpins the going concern assumption.
• Examine Business Model Viability: Assess the company’s revenue model, pipeline of projects, and prospects for reversing losses and improving cash flow, especially in the real estate development sector.
• Creditors and Payables Analysis: Scrutinize the composition of “other creditors” (£63,650) to understand payment terms, any overdue amounts, and potential risks of creditor actions.