DRONE SECURITY SOLUTIONS LTD

Executive Summary

DRONE SECURITY SOLUTIONS LTD shows significant financial stress with negative equity and a working capital deficit, raising high solvency and liquidity risks despite compliance with filing requirements. While recent increases in current assets are a positive sign, the company’s small scale and declining workforce highlight operational challenges. Further investigation into asset quality, cash flows, and strategic plans is essential before investment consideration.

DRONE SECURITY SOLUTIONS LTD - Analysis Report

Company Number: SC704359

Analysis Date: 2025-07-20 11:22 UTC

1. Risk Rating: HIGH

The company exhibits significant solvency and liquidity risks, as evidenced by persistent negative shareholders’ funds and current liabilities exceeding current assets by a substantial margin. Although it is a micro-entity, its financial position raises concerns about its ability to meet short-term obligations without additional financing or operational improvements.

2. Key Concerns:

• Negative Shareholders’ Funds: The company’s net equity remains negative (£-16,680 as of 2024), indicating accumulated losses and potential insolvency risk if this trend continues.
• Working Capital Deficit: Current liabilities (£93,675) exceed current assets (£66,629), resulting in a negative net current asset position, which signals potential liquidity problems in meeting short-term debts.
• Declining Employment and Small Scale: The average number of employees dropped from 4 to 1, suggesting either downsizing or operational challenges that may affect sustainability and growth potential.

3. Positive Indicators:

• Recent Increase in Current Assets: Current assets increased notably from £4,357 in 2023 to £66,629 in 2024, suggesting some improvement in cash or receivables position.
• No Overdue Filings: The company’s accounts and confirmation statements are up to date, indicating compliance with statutory filing requirements.
• Sole Director with Full Control: The controlling shareholder/director maintains consistent leadership, which may facilitate decisive management actions.

4. Due Diligence Notes:

• Investigate the composition of current assets to assess liquidity quality (e.g., cash versus receivables or inventory).
• Review cash flow statements (if available) or bank records to evaluate actual cash availability and ongoing operating cash flows.
• Understand the reasons behind the negative equity trend and whether there are plans for recapitalization or turnaround.
• Examine any contingent liabilities or creditor arrangements given the working capital shortfall.
• Assess the business model and market position given the SIC code “Other service activities not elsewhere classified” for operational sustainability.
• Confirm no director disqualifications or compliance issues beyond filing timeliness.