Company Number: 13000161

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

1. Risk Rating: HIGH

Justification: EMBB Ltd exhibits significant solvency and liquidity risks, as evidenced by persistent negative shareholders' funds and a material imbalance between current assets and current liabilities. The company holds substantial long-term liabilities relative to its asset base, which raises concerns about its ability to meet financial obligations.

2. Key Concerns:

• Negative Equity Position: The company has reported negative net assets (£ -1,646 as of 31 August 2023), indicating that liabilities exceed assets. This situation persisted over at least two financial years, suggesting ongoing financial distress.
• High Long-Term Creditors: There is a significant amount of creditors due after more than one year (£203,481 in 2023), including a non-instalment loan of £94,000 payable beyond five years. This level of long-term debt against relatively modest assets may impair solvency.
• Sharp Decline in Current Assets and Cash: Current assets dropped precipitously from £122,100 in 2022 to just £7,634 in 2023, with cash correspondingly decreasing from £119,520 to £7,634. This dramatic reduction could indicate liquidity strain and difficulty in funding ongoing operations.

3. Positive Indicators:

• Investment Property Asset: The company has acquired an investment property valued at £195,401 as of 2023, which represents a tangible asset that could potentially be leveraged or sold to alleviate financial pressures.
• No Overdue Filings: The company is up to date with both its accounts and confirmation statement filings, indicating compliance with regulatory requirements.
• Experienced Directors: The management team includes two directors who are British nationals and have been in position since incorporation or shortly thereafter, suggesting stable governance at the leadership level.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term liabilities, especially the composition of the £203,481 creditors due after more than one year, to assess repayment schedules, interest obligations, and covenants.
• Examine cash flow statements or management accounts (if available) to understand operational cash generation or burn, given the sharp decline in cash reserves.
• Review the valuation and liquidity of the investment property asset to determine if it can realistically support debt restructuring or provide collateral for financing.
• Confirm the absence of director or company insolvency history or disputes that might impact future governance or operations.
• Clarify the company's business model in the real estate sector and its strategy for returning to profitability, given the negative retained earnings and ongoing losses.