Company Number: 13416867

Analysis Date: 2025-07-20 13:59 UTC

1. Risk Rating: HIGH
   The company exhibits significant negative net assets and net current liabilities, indicating an ongoing solvency risk. Despite being active, the financial position is weak with liabilities exceeding assets by over £26,000 and worsening from the previous year. The small scale and negative equity raise concerns about the company’s ability to meet obligations without additional capital or restructuring.

2. Key Concerns:

• Negative Net Assets and Working Capital Deficit: Net current liabilities of £11,880 and net liabilities of £26,318 suggest the company’s liabilities exceed its assets, posing a solvency risk.
• Reliance on Director Loans: Significant short-term liabilities include £32,900 owed to directors, indicating dependence on related-party funding which may not be sustainable long-term.
• Lack of Profit Retention and Capital: The company has a minimal share capital (£1) and accumulated losses increasing to £26,319, showing ongoing operational losses or insufficient profitability.

3. Positive Indicators:

• Active Trading with Growing Debtors: Debtors increased to £33,648 from zero in the prior year, which may indicate expanding sales or customer base.
• No Overdue Filings: Company filings and accounts are up to date, reflecting compliance with statutory requirements and good governance in this respect.
• Single Director Control: Clear control by a single director and PSC may facilitate decision-making and swift implementation of remedial measures if required.

4. Due Diligence Notes:

• Investigate the nature and collectability of the debtor balance (£33,648) to assess liquidity quality.
• Review director loans terms, repayment plans, and whether these have formal agreements or risk of withdrawal.
• Obtain insight into operational performance, revenue streams, and cash flow forecasts to understand sustainability and plans to return to profitability.
• Confirm the status and servicing of the longer-term bank loan (£14,438) and any covenants or risks attached.
• Evaluate reasons behind persistent losses and negative equity, including market conditions or business model viability.