Company Number: 13735523

Analysis Date: 2025-07-29 18:29 UTC

1. Risk Rating: HIGH

Justification: The company shows significant negative net assets and shareholder funds (£-13,714), with current liabilities greatly exceeding current assets (£94,860 vs £137,670, but notably a large portion of liabilities are long term loans), indicating solvency concerns. Related party loans are substantial, suggesting reliance on director financing. The company is relatively new with limited financial history and no audit, increasing uncertainty.

2. Key Concerns:

• Negative equity position and net liabilities suggest the company is not currently solvent on a balance sheet basis.
• Large creditor amounts falling due after one year (£915,294), including director loans and other related party debts, raise questions about the sustainability of funding sources and repayment risk.
• Lack of audit and reliance on unaudited accounts under small company exemption limit transparency and reliability of financial information.

3. Positive Indicators:

• The company has tangible fixed assets of £858,770, representing investment in property (care home building), which supports operational capacity.
• Cash balance of £99,875 and debtor balances of £34,795 provide some short-term liquidity.
• No overdue statutory filings or accounts, indicating compliance with reporting requirements.

4. Due Diligence Notes:

• Investigate the terms and repayment schedule of the £915k long-term liabilities, especially related party loans, including interest rates and covenants.
• Review cash flow projections and operational profitability given the company now employs 24 people whereas it had none prior year.
• Evaluate the quality and valuation basis of fixed assets, particularly the care home building, and whether it can be leveraged or sold if needed.
• Confirm the nature of related party transactions and any conflicts of interest, especially loans from directors and companies controlled by a director.
• Assess the company’s revenue streams and contracts underpinning turnover recognition to understand operational sustainability and growth prospects.