DIALOG DYNAMO LIMITED

Executive Summary

Dialog Dynamo Limited, a recently incorporated micro-entity engaged in software development, currently exhibits a weak financial position with net liabilities exceeding assets and reliance on director funding. While regulatory compliance is maintained, the limited operational scale and negative net assets present significant solvency and liquidity risks. Further due diligence should focus on the company’s business viability, funding plans, and cash flow projections to assess its sustainability.

DIALOG DYNAMO LIMITED - Analysis Report

Company Number: 15163864

Analysis Date: 2025-07-20 18:17 UTC

1. Risk Rating: HIGH
   The company shows a net liability position of £4,329 at the financial year end, indicating negative net assets. Current liabilities exceed current assets by a significant margin, which raises immediate solvency and liquidity concerns, especially for a micro-entity with minimal operational scale.

2. Key Concerns:

• Negative Net Assets: The balance sheet reflects net liabilities of £4,329, indicating the company’s obligations exceed its assets.
• Director Loan as Liability: The £4,379 owed to the director for personal expenses is unsecured and repayable on demand, which can put pressure on liquidity and reflects reliance on director funding rather than external capital or revenues.
• Minimal Operating Scale: With only one employee and nominal current assets (£50), the company’s operational capacity and cash flow generation appear extremely limited, threatening sustainability.

3. Positive Indicators:

• Compliance: All statutory filings, including accounts and confirmation statements, are up to date with no overdue returns, indicating good regulatory compliance.
• Ownership and Control: Full ownership and control reside with a single director who appears actively involved, which may simplify decision-making and responsiveness.
• No External Debt or Contingent Liabilities: Apart from the director loan, there are no external borrowings, guarantees, or contingent liabilities disclosed.

4. Due Diligence Notes:

• Investigate the nature and timing of the director loan repayment and whether further director or shareholder funding is anticipated.
• Confirm business model viability, revenue streams, and plans to improve asset position and working capital.
• Review cash flow forecasts and any upcoming contracts or client engagements given the minimal current assets and liabilities exceedance.
• Understand the rationale for the negative net asset position at an early stage and any plans for capital injection or restructuring.
• Assess if the company is trading commercially or in a preparatory phase with expected losses.